The Labour government has recently set out how it wants to bring substantial updates to the UK’s employment legislation via the Employment Rights Bill 2024. The aim of this raft of legislation is to create fairer, more inclusive workplaces and to help to create economic growth. We’re going to take a brief look at the main aspects of the bill and what employers need to be aware of.
Re-balancing the employer-employee relationship
The Employment Rights Bill 2024 will aim to end what is perceived as a current imbalance that impacts on job security for workers. There are a number of headline proposals in this area. The bill will ban “exploitative” zero hours contracts and give workers the right to a guaranteed hours contract if they work regular hours over a defined period, the right to reasonable notice of shifts and the right to compensation if agreed shifts are then cancelled at short-notice. According to data from the Office For National Statistics just over 1 million workers are currently on a zero-hours contract and so this change will have a significant effect and may disproportionately impact on sectors where staffing flexibility is vital such as care, retail and hospitality. Under this banner the bill will also end unscrupulous fire and rehire practices. Dismissals of this type will become automatically unfair unless the employer can demonstrate that there was no genuine alternative. The current right to protection from unfair dismissal which kicks in after two years of employment is also something that the bill will change and this will become a day one right. There are concerns from many businesses around this aspect of the bill and how they would deal with employees who turn out to be poor hiring decisions but the government has tried to allay some of those fears by saying that statutory probation periods will be allowed during which a light touch dismissal process will apply.
Family friendly changes
Despite some changes in this area being made by the former government earlier this year, the Employment Rights Bill 2024 aims to further support families. Again there are numerous proposals put forward in the bill with a couple really catching the eye of employers. A stated aim of the bill and the measures it sets out is to, “make flexible working the norm where practical”. To that end the bill will further enhance flexible working rights and will require employers to explain the grounds on which they are declining flexible working request. The length of service requirements currently in place for employees to qualify for paternity leave and unpaid parental leave are also due to be scrapped under the bill and these will become day one rights. Furthermore, the bill has set out that a new right to one week of unpaid bereavement leave will be introduced for all employees. Given the sensitive nature of this subject, serious consideration and consultation will be required in order to produce appropriate guidance on how this will be managed in reality and if qualifying relationships will be established or if there will be any employer discretion.
Fair pay
As happens every year the government is committed to reviewing the recommendations of the Low Pay Commission in relation to the national minimum wage rate. Although this falls outside of the Employment Rights Bill it is still important for employers to know what is ahead of them and that from April 2025 the rate for any employers aged 21 and over will increase by 6.7% to £12.21 per hour. The bill itself seeks to support fairer pay by removing the current 3 day waiting period before employees can claim statutory sick pay and also by removing the lower earnings limit, currently £123 per week. That said it has been put forward that for low earners the bill will establish a different, lower rate of statutory sick pay. Measures set out in the bill will also specifically target adult social care as data from the Skills For Care annual report indicates that the sector lags behind the hourly rate of pay of 80% of workers in other sectors. The bill would allow the government to make regulations creating an Adult Social Care Negotiating Body, with a remit to make agreements about the pay, terms and conditions of adult social care workers in England.
Finally, it is important for employers to understand that the bill will not be making any immediate changes in legislation so there is no reason for employers to panic. Consultation on some aspects of the bill will start before the end of 2024 and further consultation will then take place throughout 2025 in order to gather feedback from all relevant stakeholders to shape the legislation and produce guidance for employers. It is anticipated that the majority of reforms proposed under the bill will not actually become effective until 2026.
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Why not also check out our blog on a similar topic Employment Law 2024
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