This week’s Employment Rights Bill – a promise for UK Workers?

Rumours are abound as to what will be discussed in this month’s Autumn statement. But the general consensus is that it will promise plenty for UK workers. 

Over the last decade, the balance of power at work has been tipped firmly away from workers. Change to laws, regulations and policies has allowed bad bosses to withhold contractual security from people who need varied hours; exploit loopholes and outsourcing to reduce rights and cut pay; and bar trade unions from organising workers and challenging bad practices.

In the King’s Speech on the 17th July 2024, the government announced two key bills on employment law: the Employment Rights Bill and the Equality (Race and Disability) Bill. Given that the 100-day period expires on the 12th of October 2024, publication of the Bill appears imminent and is expected on Thursday 10 October.

The proposals outlined in the New Deal document were far-reaching and ambitious, covering wide areas of employment law.

The government is seeking to reassure workers that it is on their side in the run-up to the Budget on October 30, which is expected to deliver tough decisions on taxes, benefits and public spending.

Preventative duty for sexual harassment  

Worker Protection Act: Employers must engage with employees – Craven Consultancy Services

On 26 October 2024, a change to the law in the Worker Protection (Amendment of Equality Act 2010) Act 2023 will come into force.

This new legislation introduces greater protection to workers from sexual harassment and marks an important shift in how sexual harassment at work should be addressed.

DRAFT Employment Rights Bill 

The government has said it will publish the draft Employment Rights Bill within 100 days of coming into power, and this is widely expected to be on Thursday this week (10 October).

This weekend, officials have suggested that it could take more than a year to bring some of the key measures into effect, meaning it could be a year to 18 months before they are applied in the workplace.

Instead, ministers are likely to encourage companies to draw up codes of conduct about contacting employees outside of working hours, rather than giving employees statutory rights as is the case in some countries.

And while employees will gain a universal right to claim sick pay from the first rather than the fourth day of illness, Labour could introduce a lower statutory sick pay rate for those who earn below the current threshold to qualify for sick pay of £123 a week, The Times suggested.

Delays to the formal introduction of legislation are likely to come from negotiations with business groups and unions on the details of the Bill, and some elements of the government’s manifesto promises could be left to secondary legislation some years into this parliament.

One business group leader told the Financial Times: “I don’t think we’ll be seeing a lot of this before 2026. There is a sense of ‘let’s get this right first time’… The mood is to use secondary legislation on anything contentious to give time for consultation.”

One reform that could be implemented more quickly is the repeal of anti-trade union legislation, where government departments have already been ordered to ignore minimum service level rules.

Strengthened protections for pregnant workers and clarifying a right to bereavement leave may also be introduced sooner rather than later.

In Summary 

Trade Unions and Industrial Action

Conservative legislation eroded trade union rights over the last 14 years, including the right to strike. Labour has committed to reversing this and is expected to provide unions with new rights for the first time in over a decade. These include granting trade unions regulated access to workplaces to recruit and organise, including digital access for remote workers, and employers will need to inform employees of their right to join a trade union regularly. In addition, the bill should also include measures to simplify the process for unions to gain recognition, removing current vote and support thresholds to make recognition easier to obtain.

The bill is also expected to repeal the Strikes (Minimum Service Levels) Act 2023 and the Trade Union Act 2016, easing unnecessary restrictions on industrial action and introducing electronic balloting. Thompsons has been vocal about this and has been involved in legal action to seek to have aspects of the minimum service levels legislation declared unlawful; as such, we are delighted that a repeal of this harmful piece of legislation, attacking the right to strike, is proposed. There is also a commitment to ensuring that trade union legislation complies with the UK’s international obligations.

Day One Right Not to Be Unfairly Dismissed

The Employment Rights Bill promises to protect employees from unfair dismissal from their first day on the job, a significant shift from the current two-year requirement. The details of how this will work remain to be seen. It is currently unclear how this will apply during probation periods, though some accommodation for employers seems likely. This shouldn’t impact existing day-one rights concerning discrimination, whistleblowing, and other rights, which will remain in place.

Restrictions on ‘Fire and Rehire’

The bill is expected to include plans to curb the practice of ‘fire and rehire’ (where an employer sacks employees and then re-engages them under new, invariably worse, terms). Labour has promised ‘effective remedies’ through the Employment Rights Bill. It is anticipated that if the practice is not outlawed, it will only be permitted as a last resort to keep businesses viable. The exact nature of these provisions and to what extent the practice should remain legally possible has been the subject of fierce debate. Whether the government will commit to specific provisions in the Bill or seek further consultation awaits to be seen.

Zero Hours Contracts and Predictability

Labour has long stated that it will ban ‘exploitative’ zero-hours contracts and plans to introduce a right to an average-hours contract based on a 12-week reference period. The proposed changes will include exceptions for seasonal work and overtime arrangements. Linked to this, the Bill should include provisions to ensure employees get reasonable notice for work schedules and fair compensation for cancelled shifts.

How the Bill aims to define an ‘exploitative’ zero-hours contract is yet to be seen. The overuse and misuse of Zero-hours contracts have negatively impacted employees working in sectors where they have become the norm. Zero-hours contracts lead to fluctuating income, no guarantee of work and individuals who regularly work for the same employer often being denied their statutory rights as employees. To address this and effectively police their use, the government will need to put clear parameters on what ‘exploitation’ is in this context. We await the bill’s response to this.

Work-life Balance and the Equality Act

The Bill should include many measures to increase work-life balance for all and improve working parents’ rights. Included in Labour’s proposals were the ‘right to switch off’ aimed at ensuring employees receive effective rest periods outside of work, a default right to flexible working from the day (with a presumption that flexible working should be possible except when it is not reasonable feasible) and changes to maternity rights banning employees returning from maternity leave being dismissed within six months, except in specific circumstances, providing greater job security.

It remains to be seen whether proposed changes to the Equality Act 2010 will be included in the Employment Rights Bill or in the Equality Bill also announced and whether this will be delivered alongside the Employment Rights Bill. However, a range of changes is expected to be introduced in whatever guise.

These include the ‘dual discrimination’ provisions included but never enacted in the 2010 Act finally being brought into force, which make it easier for employees to bring effective discrimination claims where they have been subjected to discrimination based on a combination of protected characteristics.

It is also anticipated that the Act will widen the ambit of Equal Pay claims to create a right to equality in contracts of employment not only in relation to sex, but also disability and race. Supporting these changes in relation to pay gap reporting is also anticipated, with this being widened to include reporting based on ethnicity and disability for large employers. Given that these changes will place additional burdens on employers and involve complex areas of law, it may well be that these issues are consulted on before the details of the provisions are finalised.

Fair pay

Fairness in the workplace regarding pay is a key element of Labour plans. Aligned with this is the exploitation of younger workers. The government is anticipated to link the National Living Wage to the cost of living and remove the lower age band for 18-20-year-olds, impacting sectors like retail and hospitality where younger workers are common. The government has also set its sights on removing the ability for employers to obtain free labour from young workers in the form of unpaid internships.

This exploitative practice, favouring parental financial support behind them, will be banned unless they are part of an established training or education program, ensuring employees are compensated for their work and that internships are accessible for all young people.

In other anticipated reforms, the bill is also expected to remove the waiting period for statutory sick pay and the lower earnings limit, providing immediate support when employees fall ill. Labour also stated in its New Deal that it would trial sectoral collective bargaining in the adult social care sector to improve pay and conditions, with a review to assess its benefits for other sectors. The bill may include provisions in relation to this trial and implementation, with consultation again being anticipated.

Plan to Make Work Pay 

“The plan to Make Work Pay is enormous, so it’s important to understand how we make it practical for businesses and the timetable for delivery. We also need clarity on the levels of consultation that will happen, as the last thing we want is to lock people out of the labour market.”

What can employers do to prepare?

While no immediate action is necessary for employers yet, we recommend staying up to date via our blogs and newsletter in the coming weeks and months as the details around the new legislation becomes clearer. We will be following all proposed reforms closely and our HR Consultants are always on hand to assist with any questions you may have.