During Labour's election campaign, they committed to comprehensive employment law reforms, focusing on prioritising workers with their 'Make Work Pay' agenda. True to their promise, they introduced the 'Employment Rights Bill' on 10th October 2024, targeting issues such as zero-hours contracts, enhancing protections for new parents, establishing day-one dismissal rights, and addressing low pay.
The new Labour Government stated: "This document outlines the next steps in our mission to effect change and make work pay."
Before delving into the details, the Government has expressed its commitment to consulting with key stakeholders into 2025, noting that most changes won't take effect until 2026. Even then, the Bill will require extensive parliamentary debate before any laws are enacted.
As the UK adapts to these significant employment law changes, Datum RPO is examining the 158-page Bill and providing insights into key areas employers need to monitor.
Key Provisions in the Employment Rights Bill
1. Ban on Exploitative Zero-Hours Contracts
The Bill proposes that workers on zero-hours or minimal-hours contracts gain the right to move to a contract that reflects their usual hours, based on a reference period (typically 12-weeks within the employment law sphere). It also includes provisions for reasonable notice when changing shifts, with compensation if the notice is too short. However, specific details like the reference period and what constitutes ‘reasonable’ are still under consultation. Currently, agency workers are excluded, but the Government plans to consult on how these rules may apply to them. We expect this consultation to start early in 2025.
At Datum RPO, we have a strong track record of effectively managing temporary agency workers for our clients. We prioritise compliance and conduct thorough due diligence in line with current UK employment law. Given the present circumstances, now is an excellent time to explore how we can assist you in managing your temporary labour needs while achieving your business objectives.
2. Protection from Unfair Dismissal from Day One
The Bill extends protection from unfair dismissal to employees from their first day, removing the current two-year qualifying period. However, it also introduces a statutory probationary period with specific rules for lawful short-service dismissal. The duration and details of this probationary period will be finalised through consultation, with the government currently considering a nine-month period.
3. End to Fire and Rehire Practices
The Bill seeks to make the practice of firing and rehiring employees illegal, except in cases of severe financial need to prevent company administration. Going forward, employers will face greater restrictions when altering employee contracts if they cannot gain agreement. The government may also close any potential loopholes allowing companies to vary terms through contract clauses.
4. Flexible Working as a Default Right
Initially proposed as a four-day work week, the Bill now seeks to establish flexible working as the default option, requiring employers to demonstrate that any requests for flexibility are unfeasible. Although the existing legal grounds for rejecting such requests will still apply, businesses will need to provide strong justification for any denials.
5. Changes to Statutory Sick Pay (SSP)
The Bill eliminates the current three-day waiting period for SSP and the lower earnings limit (LEL), ensuring employees receive a portion of their wages regardless of earnings level. This move increases support but may pose challenges for small businesses, sparking anticipated debate during consultations. Datum RPO, as a neutral vendor managed service provider, can help organisations navigate the proposed changes to Statutory Sick Pay (SSP) by ensuring compliance with new regulations, managing payroll adjustments for temporary workers, and providing guidance on the financial implications for businesses of all sizes.
6. Enhanced Rights for New Parents
The Government intends to create a more family-friendly work environment by eliminating qualifying periods for parental and paternity leave, granting these as day-one rights. Additionally, it plans to expand bereavement leave to include a broader range of relatives, though further clarification on the specifics is still required.
What’s Not Included in the Bill?
Some anticipated measures, such as the "Single Status of Worker" and the "Right to Disconnect," have not been included but remain on the Government's agenda. These complex changes are outlined in a "Next Steps" document, indicating ongoing consultation before any further legislation. Datum RPO are closely monitoring these developments and will continue engaging with clients and industry bodies to ensure businesses are prepared for upcoming changes. We will also advocate for clarity and fairness as these proposals evolve.
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