Subscribe to our newsletter to receive business tips, learn about new funding programmes, join upcoming events, take e-learning courses, and more.
Take the first step to successfully starting and growing your business.
Join for free)
Posted: Thu 10th Oct 2024
The government's much discussed Employment Rights Bill has been introduced today, in a move ministers describe as "the biggest boost to pay and productivity in the workplace in a generation".
Fulfiling a promise in Labour's general election manifesto and the 'Plan to Make Work Pay', the overhaul of workplace rights brings forward 28 individual employment reforms in a Bill of 158 pages.
The Bill is expected to pass into law in June or July next year. Consultations on some issues will take longer, with most rights not introduced until autumn 2026.
The Employment Rights Bill allows workers to receive parental leave and bereavement leave from the first day of a job, with protection from unfair dismissal also a right from day one.
The government said the change will bring an extra 30,000 fathers or partners into scope for paternity leave, and an additional 1.5 million parents will have unpaid parental leave a right from day one.
The waiting period before sick pay kicks in for an employee (currently four days in a row of sickness) will be reduced. The lower earnings limit (currently at least £123 per week on average, before tax) will be removed.
The government will consult on what the percentage replacement rate for those earning below the current flat rate of statutory sick pay should be.
"Stronger protections" will be provided for pregnant women and new mothers returning to work, including protection from dismissal whilst pregnant, on maternity leave and within six months of returning to work.
Employees will have the right to a guaranteed hours contract if they work regular hours over a 12 week period, with people able to remain on zero hours contracts if they prefer to.
Being able to work flexibly will be the default for all workers, unless the employer can show it's not feasible.
The government will consult on a new statutory probation period for companies' new hires, during which time it will be easier for an employer to fire a worker fairly. The government said its preference for the length of the probation period in nine months.
This consultation is seen as the government providing a compromise as a result of complaints by business groups that a probation period is needed. It said:
"The government recognises concerns from business about a potential rise in legal liability and the impact on hiring decisions. Significant additional claims would also create unwelcome additional work for the tribunal system and for Acas.
"The government will identify ways to signpost and support employees to ensure they have proper recourse if they are unfairly dismissed but also make clear where bringing claims might be unsuccessful."
Responsibilities for large businesses inclde creating action plans on addressing gender pay gaps and supporting employees through the menopause.
Different government enforcement bodies will come together to create a new enforcement agency. The government says there will be "better support for employers who want to comply with the law and tough action on the minority who deliberately flout it".
The government will launch a consultation on tightening the ban on unpaid internships by the end of the year.
The government will ask the Low Pay Commission, which advises the government on the National Living Wage and the National Minimum Wage, to consider the cost of living when setting the rates.
The government also intends to "remove discriminatory age bands", so all adults have the right to the same minimum pay rate.
Alongside the Employment Rights Bill, the government has published a document outlining reforms it wants to implement in the future. They include:
A 'right to switch off' that prevents employees from being contacted by their employer out of hours, except in exceptional circumstances.
Draft Equality (Race and Disparity) Bill to make it mandatory for large employers to report their ethnicity and disability pay gap.
A consultation on a move towards a single status of worker and on a simpler framework that differentiates between workers and the genuinely self-employed.
Review health and safety guidance and regulations, including neurodiversity awareness in the workplace, and how to modernise health and safety guidance for extreme temperatures.
Reviews into the parental leave and carers leave systems to "ensure they are delivering for employers, workers, and their loved ones".
Consultation on surveillance technologies and negotiations with trade unions and staff representatives.
In the next steps document the government said it "understands that adjusting to these new reforms will take time and is committed to ensuring that all stakeholders receive appropriate time to prepare for these changes ahead of their commencement".
It added:
"As part of our consultation, government will seek views from stakeholders to ensure where more time is needed, this is taken into consideration. Government also welcomes innovative ideas on how to ensure we support all businesses in getting the right advice on any upcoming changes.
"This government will also ensure that, where appropriate, guidance is published to ensure all stakeholders have the information required to make necessary adjustments."
Deputy prime minister Angela Rayner said:
“This Labour government's plan to make work pay is central to achieving our growth mission, boosting productivity. After years of stagnation under the Tories, we're replacing a race to the bottom with a race to the top, so employers compete on innovation and quality.
"It's by making work more secure and modernising workplaces that we will drive up productivity, improve living standards, generate jobs and investment, and pave the way for sustained economic growth that benefits working people.”
Business secretary Jonathan Reynolds said:
"It is our mission to get the economy moving and create the long term, sustainable growth that people and businesses across the country need.
“Our plan will give the world of work a much-needed upgrade, boosting pay and productivity.
"The best employers know that employees are more productive when they are happy at work. That is why it's vital to give employers the flexibility they need to grow whilst ending unscrupulous and unfair practices.
"This upgrade to our laws will ensure they are fit for modern life, raise living standards and provide opportunity and security for businesses, workers and communities across the country."
Emma Jones, founder of Enterprise Nation, said:
"Small businesses are the backbone of our economy, yet they face unprecedented challenges. While we support enhancing workers' rights, the proposed reforms, though well-intentioned, could significantly burden start-ups and micro-enterprises operating with limited resources.
“Measures such as mandating sick pay from day one and altering probation periods may increase uncertainty and administrative costs for small businesses, potentially discouraging them from hiring new staff to grow their business.
"Small companies should also be exempt from proposed fines for failure to comply with the new rules, and given ample time, support and flexibility to help them meet the requirements.
"Proposals to boost worker protection must be balanced against the unique needs of start-ups and micro businesses. We urge the government to directly consult small businesses to understand the practical implications of these proposals.
"Doing so would help achieve the government's desired outcomes without inadvertently pressuring the very enterprises they aim to support."
