How will the Employment Rights Bill affect employers and employees?

The Labour government have described it as a “once in a generation” change. Deputy Prime Minister Angela Rayner emphasised that this bill represents the most significant upgrade to workers’ rights in a generation, aiming to boost pay and productivity with modern employment laws.

Key Changes & Laws

Day-One Rights
Immediate Protections: Employees will now have rights from their first day of employment, including: Paternity, Parental, and Bereavement Leave, these leaves are now available from day one.

Protection from Unfair Dismissal: The two-year qualifying period for protection from unfair dismissal is removed.

Fire and Rehire Practices
End to Unfair Practices: The bill ends the practice of firing employees only to rehire them on less favourable terms. This aims to protect workers from being forced into less favourable conditions

Statutory Sick Pay
Enhanced Sick Pay: The lower earnings limit is removed, and the waiting period before sick pay starts is eliminated. This ensures all workers have access to sick pay from day one.

The right to statutory sick pay from the first day of illness will end the current three-day waiting period and remove the lower earnings limit, while the right to flexible working will mean that employers who refuse requests will have to demonstrate why they think their decision is reasonable against eight criteria.

Zero-Hours Contracts
Ban on Exploitative Contracts: The bill bans exploitative zero-hours contracts, ensuring workers have more predictable schedules. Workers can still choose zero-hour contracts if they prefer, but they will have the right to a guaranteed hours contract if they work regular hours over a defined.

Flexible Working
Default Flexible Working: Flexible working will be the default option where practical, allowing employees to request flexible working arrangements from the start of their employment.

Gender Pay Gap and Menopause Support
Action Plans for Large Employers: According to equality and human rights commission Large employers must create action plans to address gender pay gaps and support employees through menopause.

Impact on Businesses, Employers, and Employees
Businesses:

Compliance Costs
Businesses may face increased costs to comply with the new regulations, such as adjusting contracts and implementing new policies.

Employee Retention
Improved rights and benefits could lead to higher employee satisfaction and retention.

Administrative Burden
There may be an initial administrative burden to update practices and ensure compliance.

Employers:

Hiring Practices
Employers will need to adjust their hiring practices to accommodate the new day-one rights and flexible working arrangements.

Training and Awareness
Employers will need to train HR and management teams on the new laws to ensure proper implementation.

Employees:

Job Security
Employees will benefit from increased job security and better working conditions from the start of their employment.

Work-Life Balance
The emphasis on flexible working and support for parental and bereavement leave will improve work-life balance.

Health and Wellbeing
Enhanced sick pay and support for menopause will contribute to better health and wellbeing at work.

Key Dates

October 2024: The bill was introduced and key details were announced.

2025: Consultations with businesses and trade unions will begin.

2026: Most changes are expected to come into force, giving businesses time to prepare.

How to prepare for the changes

Training and Communication

Staff Training: Conduct training sessions for HR and management teams to understand the new laws and their implications. Employee Awareness: Communicate the changes to all employees, ensuring they are aware of their new rights and how to exercise them.

Adjust Hiring Practices

Onboarding Processes: Revise onboarding processes to incorporate day-one rights, ensuring new hires are aware of their entitlements from the start.

Flexible Working Requests: Develop a system to manage flexible working requests effectively, making it the default option where practical.

Enhance Employee Support

Wellbeing Programs: Implement or enhance programs to support employee wellbeing, including support for menopause and mental health.

Parental and Bereavement Leave: Ensure that policies for parental and bereavement leave are clear and accessible from day one.

Legal and Compliance Checks
Consult Legal Experts: Engage with legal experts to ensure all changes are compliant with the new laws and to get advice on complex issues.

Regular Audits: Conduct regular audits of HR practices and policies to ensure ongoing compliance with the new regulations.

By taking these steps, businesses can ensure they are well-prepared for the new Employment Rights Bill and can smoothly transition to the new regulations. If you need further assistance or have specific questions, feel free to reach out!