Key Changes in Labour’s Employment Rights Bill: What Employees and Employers Should Know

Labour’s Employment Rights Bill introduces several major changes aimed at improving workers’ conditions and making workplaces fairer. Here’s a summary of the most important updates.

1. Day-One Rights

Workers will gain protection against unfair dismissal from day one of employment, benefiting around 9 million people. Day-one rights will also be extended to paternity leave, unpaid parental leave, and sick pay, alongside existing day-one maternity leave rights. A review of all parental-leave rights is planned.

Impact on Employers: Companies will need to adjust their policies for new hires, including dismissal procedures, to comply with the new rights.

2. Sick Pay Entitlement

Under the bill, sick pay will be available from day one, removing the previous four-day waiting period. Additionally, the lower earnings limit for statutory sick pay will be abolished, expanding coverage to more workers.

3. Zero-Hours Contracts

More than 1 million people on zero-hours contracts will gain the right to request guaranteed working hours after 12 weeks of regular shifts. Workers can choose to remain on zero-hours contracts if they prefer.

4. Ban on Fire and Rehire

The controversial practice of ‘fire and rehire’ will be banned in all but the most extreme cases, where a business is at risk of collapse. This means employers cannot dismiss workers to rehire them on less favourable terms unless absolutely necessary.

Impact on Employers: Employers will need to seek alternatives before resorting to this tactic, making consultation and negotiation key in restructuring efforts.

5. Flexible Working as Default

Flexible working will become the default unless there are valid business reasons not to allow it. Employers will also be required to create policies addressing the gender pay gap and supporting female employees, particularly through menopause.

6. Extended Tribunal Time Limits

The time frame for employees to bring claims to the Employment Tribunal will be extended from three months to six months.

Impact on Employers: Longer time limits mean employers must ensure comprehensive documentation and record-keeping in case of disputes.

7. Minimum Wage Reform

The Low Pay Commission will be required to consider the cost of living when setting the minimum wage. Age bands that set lower wages for younger workers will be removed, meaning pay rises for many young employees.

8. Probation Period Consultation

A statutory probation period is being consulted, with the possibility of extending it to nine months. This lighter-touch approach during probation will still allow employees to claim for unfair dismissal.

9. Enforcement and Union Rights

A new Fair Work Agency will oversee the enforcement of these rights. Union rights will also be strengthened, with plans to introduce online balloting and relax restrictions on union activities.

What’s Missing?

Some key changes, like pay transparency and single worker status, are still under consultation or have been delayed for further review.

Employers and employees alike should stay informed as these changes unfold and prepare for how they will affect their working environments. Watch this space for updates as the bill becomes clearer and more details emerge.