As part of the new Labour government’s plan to “Make Work Pay”, the House of Commons are currently in the early stages of passing a new piece of legislation known as the Employment Rights Bill. This legislation aims to provide greater...
As part of the new Labour government’s plan to “Make Work Pay”, the House of Commons are currently in the early stages of passing a new piece of legislation known as the Employment Rights Bill. This legislation aims to provide greater support for employers, employees and unions.
This article highlights some of the key measures that will be included in the Bill and what these mean for employers and employees.
Removal Of Qualifying Period for Unfair Dismissal Claims
At present, an employer can dismiss an employee who has less than two-years’ of continuous service without needing to demonstrate a fair reason for dismissal. This means that employees are effectively unprotected for the first two years of their role, save for some limited circumstances. This is particularly problematic for employees with financial commitments and those with short notice periods.
As part of the Employment Right Bill, the Government are looking to remove this two-year requirement, meaning that employees will be afforded greater protection from day one of their employment.
The obvious concern for employers will be that this increases the risk of employees bringing unfair dismissal claims, which, even if unsuccessful could have a detrimental impact on the business. It also means that employers will have to spend time in dealing and responding to claims of this nature.
In order to ensure balance in the new system, the Government have proposed that they will simultaneously establish a new statutory probation period known as an “initial period of employment”. The idea is that employers will be able to impose an initial probationary period (suspected to be around 9 months), to enable them to gauge whether or not the employee is a good fit for their company, whilst also affording greater protection to the employee. During this period, employers will have flexibility in dismissing employees, although they will still be required to follow a specific process which is not currently required for employees with under two years’ service.
Zero Hours, Low Hours and Agency Worker Contracts
It is estimated that over 1 million people in the UK are employed on zero hours contracts. The use of zero hours contracts have been long criticised as a means of abusing low-income workers in that they provide no job security and a lack of certain income. They do not offer a stable cash flow and are arguably exploitative of employees. .There is very limited protection for workers on such contracts.
A ban on exclusivity terms in zero-hour contracts was introduced in May 2015. Under the new Employment Right Bill, the Government intends to go further than any previous reforms. The Bill proposes a ban on exploitative zero-hour contracts altogether, replacing them with a new right to a “reasonable” contract that reflects the actual hours a worker regularly works.
For workers who consistently work the same number of hours reach week, employers may be required to offer a contract that guarantees those hours. This aims to provide more financial stability, predictable income and improved rights for individuals in unstable employment.
Agency workers are also expected to benefit from reforms, including enhanced rights to equal pay and conditions after a shorter qualifying period and improved enforcement of existing rules. This marks a step towards closing loopholes that previous left agency workers at a disadvantage compared to directly employed staff.
Greater rights to Union Representation and Collective Bargaining
The Bill also includes proposals to strengthen the rights of trade unions and simplify the process for collective bargaining. This includes the introduction of a statutory right for unions to access workplaces to speak with employees, as well as measures to make it easier for unions to be recognised by employers.
The aim is to provide more of a constructive and balanced relationship between employers and employee representatives, particularly in sectors with low union representation, such as tech, agriculture and hospitality.
Day One Rights and Family-Friendly Measures
Another proposal that has been put forward is the introduction of “day one” rights for employees. This includes the right to request flexible working and parental leave from the first day of employment, removing the current qualifying periods that delay access to these rights.
There are also plans to review and enhance statutory sick pay and parental leave policies, with the intention of making them more accessible for those in part-time, temporary or gig economy roles.
What Does This Mean For Employers?
If the current proposals for reform were introduced, it would be the most significant shift in employment law in over a decade. Whilst the reforms aim to improve security and fairness for employees, employers must take steps to ensure that their policies and contracts are up to date in compliance with the new legislation.
At the present time, it is crucial for businesses to stay informed and seek professional guidance as the Bill progresses through Parliament. While many of the details remain to be reviewed and finalised, proactive preparation and staying informed will ensure compliance and avoid any potential disruption when the changes come into force.
Conclusion
Ultimately, the Employment Rights Bill is a significant step in reshaping the UK’s employment landscape, with a clear emphasis on protecting employees whilst still considering the position of employers. Whether you are an employer or an employee, understanding the direction of these proposed reforms will be essential in navigating the future of the working world.
Article written by our Trainee Solicitor, Maisie Scrivens, assisted by Partner Associate, Tom Oliver.
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The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute, legal advice, and should not be relied upon as advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. All content was correct at the time of publishing. Legal advice should always be sought in relation to specific circumstances.