Employment Rights Bill – what you need to know

In the King’s speech in July 2024, the government announced a new Employment Rights Bill. This legislation is a priority. It will be introduced to parliament within Labour’s first hundred days in office. Given that many THP clients are employers, we think now is a good time to talk through the proposed changes.

What is the Employment Rights Bill?

The Employment Rights Bill is part of the government’s ‘Plan to Make Work Pay’ strategy.

In addition to the bill, the government plans to deliver a ‘genuine living wage’ that accounts for the cost of living. Age bands will be removed so all adult workers benefit. We will update you about changes to the living wage when we know more.

Changes to the living wage fall outside the scope of the Employment Rights Bill. This legislation is designed to strengthen worker’s rights and make jobs more secure. We’ve summarised the proposed changes below.

1. Zero-hours contracts will be banned

Workers will have a right to contracts that reflect the hours they regularly work. Employers will have to give reasonable notice of changes and pay proportionate compensation for cancelled or shortened shifts.

2. ‘Fire and Rehire’ to end

Both ‘Fire and Rehire’ and ‘Fire and Replace’ practices will be outlawed.

3. Employee protections from day one

Parental leave, sick pay and protection from unfair dismissal will apply from day one. Employers will still be able to use probationary periods.

4. Changes to statutory sick pay

The Employment Rights Bill will remove the lower earnings limit for statutory sick pay. All workers will thus be able to benefit from it.

5. Flexible working to become the default

Employers will need to allow flexible working as far as it is reasonable. It will be interesting to learn more details about how this will operate.

6. Protections for new mothers

It will be illegal to dismiss a woman who has had a baby until she has been back at work for a six-month period. There will be some exceptions to this rule.

7. A new enforcement body

There will be a new enforcement body called the Fair Work Agency. This will be responsible for strengthening the enforcement of workplace rights.

8. Fair pay agreements

There will be a new Fair Pay Agreement for the adult social care sector. When reviewed, government will look at how a similar arrangement could benefit other sectors.

9. Reintroduction of the School Support Staff Negotiating Body

This will be responsible for establishing national terms and conditions, career progression routes and rates of fair pay for school support staff.

10. Removing restrictions on trade union activity

So far we know the government plans to remove the imposition of minimum service levels during strikes in sectors like health, education, fire and rescue. Labour says it wants to base industrial relations around ‘good faith negotiation and bargaining’.

11. Simplifying statutory recognition

This is essentially to ensure workers and union members have a reasonable right to access a union at work.

Another bill that affects employment rights

In addition to the Employment Rights Bill, the government has announced a Draft Equality (Race and Disability) Bill. This will affect employers in two key ways:

1. Enshrining in law the right to equal pay for ethnic minorities and disabled people. This will make it simpler for people to pursue equal pay claims if they have been underpaid.
2. Introducing mandatory ethnicity and disabled pay reporting for employers that hire 250 people or more. This will help employers and government better understand pay gaps.

Employment rights and your business

We hope this summary of the upcoming changes to employment rights has been helpful. We will update you when the legislation passes through parliament. There are some areas where more detail would be helpful, particularly about what counts as a ‘reasonable’ approach to flexible working requests.