What does the new Employment Rights Bill mean for businesses?

Last week, the Government published its new Employment Rights Bill.

The detailed document marks Labour's biggest step forward in enacting one of their key election offers, looking to revolutionise employee rights.

While many of the changes will take some time to consult and implement, businesses must begin preparing to avoid issues further down the line.

To support, here we've highlighted the key changes detailed in the legislation.

Day-one rights

Under the new legislation, workers will have day-one rights, including protection against unfair dismissal and paternity leave.

Note: maternity leave is not included under this change as it is already a day-one right.

Prior to this change, workers had to wait two years to access these basic rights and protection.

It's thought that around 9 million employees will benefit from this change.

Without a doubt, this is a positive change for workers.

However, some experts have expressed concerns that it could have adverse implications on recruitment; following the change, employers may express greater caution when hiring and take fewer risks on candidates who don’t have the experience and skills but show potential.

Only time will tell what long-term impact this change has, but we advise businesses to invest in their people and focus on upskilling, viewing it as an opportunity rather than a risk.

Ending zero-hour contracts

It's thought that there are currently 1.03 million UK workers on zero-hour contracts.

The goal of the proposed legislation is to provide these workers with a baseline level of security and predictability.

Through the legislation, Labour aims to tackle exploitative zero-hour contracts, putting an end to ‘one-sided’ flexibility and aiming to guarantee people working hours if they want them.

Following the change, people will have a contract reflecting the hours they truly work, with Labour suggesting a 12-week reference period is used to determine these hours.

However, workers can request to remain on a zero-hour contract if that is their preference.

Some sources have warned that exploitative employers may keep their shifts irregular and unpredictable as a way around this change.

Tackling fire and rehire

Another big change outlined in the Employment Rights Bill is ending 'fire and rehire' in all but the most extreme cases.

Context: fire and rehire relates to when a worker is made redundant, only to be rehired on typically worse terms, conditions and pay.

The goal is to provide workers with the peace of mind that their terms and conditions (T&Cs) can't be voided under threat of dismissal.

Make flexible and fairer working the norm

The Employment Rights Bill will look to make flexible working the norm where feasible as well as introducing actions to make the workplace fairer.

The Government stated: “As part of the Bill, we’ll introduce new measures to help make the workplace more compatible with people’s lives. This includes making flexible working the default where practical.   

“Large employers will be required to create action addressing gender equality, including supporting employees through menopause, and protections against dismissal will be strengthened for pregnant workers and those returning from maternity leave.   

“This is all with the intention of keeping people in jobs for longer, reducing recruitment costs for employers by increasing staff retention and helping the economy grow.”  

The Fair Work Agency

Plans are also on the way to establish a new Fair Work Agency (FWA).

This Fair Work Agency will bring together a range of existing bodies to enforce rights such as Holiday Pay.

The FWA will also be on hand to offer support to employers looking for guidance on how to comply with the law.

Strengthening Statutory Sick Pay

Entitlement to Statutory Sick Pay (SSP) will improve, providing workers access to sick pay from the first day of illness rather than from day four.

The Government has also stated they are removing the lower earnings limit for all workers.

Bracing for change

Improving worker rights is a noble cause, but it poses the question: can businesses handle such large-scale change?

While it could be a couple of years before we see everything in the legislation enforced, we advise businesses to start thinking ahead.

The last thing you want is to leave preparation until the last minute and be caught out with non-compliance or taken to an employee tribunal.

Suppliers, such as IRIS, have a fundamental requirement to update their products and services in line with any legislative changes, in some cases removing the more logistic burden from businesses.

Whether you want assurance that your system reflects any major employee changes or you simply want a trusted provider with who you can outsource tasks such as payroll, a good supplier goes a long way in managing uncertainty.