Labour’s origins as a political party are based on the rights of working people, therefore it’s no surprise they are proposing a new bill after being out of power for 14 years. This new legislation forms a key part of Labour's agenda to address inequalities in the workplace, promote fair treatment, and create a more balanced relationship between employers and employees. Here's a closer look at what the bill entails and how it could reshape the landscape of employment rights in the UK.
Why a new Employment Rights Bill?
The Employment Rights Bill will lead to the primary legislation required to deliver, ‘Labour’s Plan to Make Work Pay: Delivering A New Deal for Working’ and is anticipated to be laid before parliament by 12 October 2024.
The bill comes in response to longstanding calls for stronger worker protections in the UK, particularly in light of the challenges faced by employees during the Covid-19 pandemic, the rise of the gig economy, and ongoing concerns about insecure work and low wages. Labour's proposed legislation seeks to address these issues by creating a fairer and more secure labour market that reflects the realities of modern work.
It's also part of Labour’s broader effort to reverse what they call, many deregulation trends of previous Conservative governments, which the party feels have weakened workers’ rights and created an environment where unstable work has flourished.
Key elements of Labour’s Employment Rights Bill
Banning fire and rehire practices: One of the headline provisions of the new bill is a ban on ‘fire and rehire’ practices, where employers dismiss employees only to rehire them on less favourable terms. This practice has been increasingly criticised for undermining job security and forcing workers to accept lower pay and worse conditions. The bill will make it illegal for employers to use this tactic, ensuring greater stability and fairness for employees.
Banning “exploitative” zero-hour contracts: Ensuring workers have a right to a contract that accurately reflects their regular working hours and that all workers get reasonable notice of any change in shift with proportionate compensation for any shifts cancelled or shortened. This will eliminate ‘one-sided’ flexibility, providing a basic level of security and predictability in all jobs.
Introduction of a £15 minimum wage: The Labour government has committed to raising the national minimum wage to £15 per hour. This increase is aimed at addressing wage stagnation and the cost-of-living crisis, ensuring that all workers receive a fair day’s pay for a fair day’s work. The new minimum wage is expected to benefit millions of low-paid workers and help reduce in-work poverty.
The strengthening of collective bargaining rights: The bill will enhance collective bargaining rights by promoting trade union representation in workplaces. Labour plans to introduce new laws to ensure that trade unions are better able to represent their members and negotiate on their behalf. This could include mandating collective bargaining in sectors where pay and conditions are particularly poor, such as social care and hospitality.
Flexible working as a default right: Under the legislation, all employees will have the right to request flexible working arrangements from day one of employment. This is aimed at improving work-life balance, particularly for those with caring responsibilities, disabilities, or other personal commitments and hopefully encourage more people back into the world of work. If you, as an employer, decide to refuse requests from employees you must be prepared to have a clear business reason.
Enhance the rights of gig economy workers: It is expected that the bill will also address gig economy workers and those on zero-hours contracts, by ensuring they have access to basic rights such as sick pay, holiday pay, and protection against unfair dismissal. In a nutshell, this could involve reclassifying gig workers as employees rather than independent contractors, guaranteeing them greater rights and protections under the law.
Protection from workplace harassment: Labour’s new legislation will introduce stronger protections against workplace harassment, including third-party harassment (by customers or clients) and ensuring that employers have a clear duty to prevent harassment and discrimination. Under the bill, this may involve stricter penalties for non-compliance and more robust support for employees to report harassment without fear of retaliation.
Greater job security for new parents and pregnant women: It’s expected the bill will extend redundancy protection for pregnant employees and those returning from maternity leave. This would make it unlawful for employers to make these workers redundant from notification of pregnancy until six months after returning to work.
Abolishing any employment rights qualifying periods: Labour plans to abolish the qualifying period currently required to access certain employment rights, such as protection against unfair dismissal, which currently requires two years of continuous employment. This change would allow all workers to enjoy full employment rights from day one of their job.
The right to switch off: Ministers are exploring a new initiative to grant employees the “right to disconnect”, ensuring that homes don’t turn into round-the-clock offices. If this policy is enacted, employers would be prohibited from regularly contacting employees outside of standard working hours, with possible legal repercussions for violations. The goal is to sustain employee motivation and productivity while tackling the growing issue of “presenteeism culture”. Ireland has already implemented a code of practice on this right, and Belgium mandates that companies with more than 20 employees create formal agreements. Labour intends to adopt similar models, promoting constructive discussions on workplace policies that benefit everyone.
Sickness absence: Changes to Statutory Sick Pay (SSP) will involve removing the lower earning threshold required for SSP eligibility, and abolishing the waiting period before SSP benefits can commence.
Carer’s leave: Carer’s leave to be reviewed for potential paid options and bereavement leave entitlements for all employees to be clarified.
Fair Work Agency: Establishing a new single enforcement body to strengthen enforcement of workplace rights.
What impact could the bill have?
The introduction of the new Employment Rights Bill represents a landmark shift in the landscape of UK employment law, one that will likely bring about profound changes for both employees and employers. First and foremost, the prohibition of ‘fire and rehire’ tactics and the establishment of a £15 minimum wage are set to create a new standard of job security and fairness across the nation. These measures are expected to alleviate financial insecurity for millions, particularly those in low-income roles, fostering a more equitable working environment.
Additionally, the bill’s emphasis on flexible working and collective bargaining rights could fundamentally transform workplace dynamics. For employers, this shift may necessitate a more proactive approach to managing workplace relations and may require adaptations to existing working practices to comply with the new legislative requirements.
From a business perspective, the changes brought about by the bill will certainly pose challenges. For instance, the increase in the minimum wage and the potential reclassification of gig economy workers could lead to higher operational costs, particularly for small businesses. As an employer, you will need to prepare for these changes by reviewing your current employment contracts, policies, and practices to ensure compliance with the new standards. However, it is also crucial for you to recognise that an engaged, well-treated workforce can lead to increased productivity and reduced turnover, ultimately benefiting your business in the long run.
Significantly, the bill also seeks to address systemic inequalities within the workplace. Enhanced protections for pregnant women, new parents, and workers facing harassment are expected to promote greater gender equality and inclusion. By extending redundancy protections and strengthening rights against workplace harassment, the legislation aims to create safer and more supportive working environments for all employees. Here you will need to reassess and take a fresh look at your workplace policies, ensuring they foster a culture that not only complies with these new legal obligations but actively promotes fairness and respect.
Lastly, Labour feels that the bill represents a forward-thinking effort to modernise UK employment law to better reflect the evolving nature of work in the 21st century. In addressing issues like gig economy workers’ rights, Labour’s proposal tackles the gaps in current legislation that have left many vulnerable to exploitation. For employers, this will likely mean re-evaluating the status of their workforce and ensuring that their practices align with the new legal definitions and rights. While this may bring about short-term complexities, it ultimately promises a more level playing field where fair treatment and justice in the workplace are paramount.
While Labour’s new bill is likely to face debate and opposition, particularly from some employers and business groups, the bill reflects Labour's commitment to tackling inequality and improving conditions for workers across the country. If successfully implemented, it could mark a transformative moment in the history of UK employment rights. Yes, it will bring its share of challenges for businesses, particularly around compliance and increased costs, but the bill also offers substantial opportunities to enhance the fairness and sustainability of work in the UK.
Our local offices are hosting an array of events on this topic in the coming months, to find an online or fae-to-face event near you, visit our events page.
