The Employment Rights Bill will cover a range of issues, including minimum wage regulations, probationary periods, and collective bargaining rights.
The bill aims to look at concerns around zero-hours contracts, unfair dismissal and controversial 'fire and rehire' practices. Additionally, it also aims to enhance trade union rights, improve redundancy protection and clarify employment status classifications.
Key provisions
The provisions outlined in the bill could potentially enhance worker protections and create a fairer working environment.
Key provisions are:
Day one rights: The bill proposes that triggers for unfair dismissal protection, sick pay and parental leave to be removed, making payment available from the first day of employment
Flexible working: Employees can currently request flexible working from day one; however, the revised bill could see flexible working become a day one right if arrangements are ‘reasonably feasible’. This would strengthen flexible working arrangements and potentially replace the 8 business reasons an employer can use to reject a request with fairer terms
Zero-hours contracts: The bill aims to ban exploitative zero-hours contracts. This would not automatically make zero-hour contracts unlawful, but would create more harsh guidelines on their use
Fire and rehire: The government plans for 'fire and rehire' practices to become unlawful. They recently introduced provisions created by the earlier government to reinforce the dismissal and re-engagement code of practice
Employment status: Although this could potentially take a while to implement, the bill proposes to merge employee and worker status, potentially extending unfair dismissal protection to a broader population
Collective redundancy: An important point to consider for large trusts or local authorities, is that the legislation plans to amend collective redundancy consultation thresholds, triggering them based on the number of people impacted across the employer's business rather than within each specific establishment
Post-maternity protection: The government previously had introduced enhanced redundancy protection for those recently returning from maternity leave. However, Labour has announced they intend to strengthen this, making it unlawful to dismiss a woman six months after returning from leave. It is likely they may create an ‘exceptional circumstances’ reason that would include gross misconduct and the end of fixed-term contracts, but this is yet to be defined
TUPE: Contracting out will be subject to a ‘public interest test’ to decide if it is value for money, affects the quality of the provision, and meets economic and social goals. Less favourable terms will be banned for new employees recruited into organisations that have TUPE’d from local authority employees. This could introduce a need to harmonise terms before a TUPE transfer, lengthening the process and reducing the incentive for external providers.
Implications for employers and employees
The proposed changes will no doubt have a significant effect on both employees and employers. The biggest impacts we expect are:
For employees:
Enhanced job security and protection from the start of employment
Improved work-life balance through flexible working rights
Improved support for new parents and those requiring sick leave
Increased protections against unfair dismissals.
For employers:
Greater recruitment risks due to day one unfair dismissal rights
Need for a more forceful performance management processes for new recruits
Potential changes to employment contracts and people management policies
Potential increase in consultation time for TUPE transfers and redundancies
Possible increase in employment tribunal claims.
The government has stated that employers will still use probationary periods to assess new hires, although the details of how this will work in practice are yet to be confirmed.