10.10.2024

Government unveils most significant reforms to employment rights

Today (10 October) ministers have unveiled the Employment Rights Bill to help deliver economic security and growth to businesses, workers and communities across the UK.

Getting the labour market moving again is essential to economic growth with one in five UK businesses with more than 10 employees reporting staff shortages. Flexibility, for workers and businesses alike, is key to answering this challenge and is at the heart of the legislation to upgrade the law to ensure it is fit for modern life and a modern economy.

The existing two-year qualifying period for protections from unfair dismissal will be removed, delivering on the manifesto commitment to ensure that all workers have a right to these protections from day one on the job.

The government will also consult on a new statutory probation period for companies’ new hires. This will allow for a proper assessment of an employee’s suitability to a role as well as reassuring employees that they have rights from day one, enabling businesses to take chances on hires while giving more people confidence to re-enter the job market or change careers, improving their living standards.

The bill will bring forward 28 individual employment reforms, from ending exploitative zero hours contracts and fire and rehire practices to establishing day one rights for paternity, parental and bereavement leave for millions of workers. Statutory sick pay will also be strengthened, removing the lower earnings limit for all workers and cutting out the waiting period before sick pay kicks in.

Accompanying this will be measures to help make the workplace more compatible with people’s lives, with flexible working made the default where practical. Large employers will also be required to create action plans on addressing gender pay gaps and supporting employees through the menopause, and protections against dismissal will be strengthened for pregnant women and new mothers. This is all with the intention of keeping people in work for longer, reducing recruitment costs for employers by increasing staff retention and helping the economy grow.

A new Fair Work Agency bringing together existing enforcement bodies will also be established to enforce rights such as holiday pay and support employers looking for guidance on how to comply with the law.

Business Secretary Jonathan Reynolds said: "It is our mission to get the economy moving and create the long term, sustainable growth that people and businesses across the country need. Our plan will give the world of work a much needed upgrade, boosting pay and productivity.

"The best employers know that employees are more productive when they are happy at work. That is why it’s vital to give employers the flexibility they need to grow whilst ending unscrupulous and unfair practices.

"This upgrade to our laws will ensure they are fit for modern life, raise living standards and provide opportunity and security for businesses, workers and communities across the country."

Alongside the legislation, a ‘Next Steps’ document for the Make Work Pay Plan will be published outlining the government’s vision and long-term plans and setting out ambitions for the plan to grow the economy, raise living standards across the country and create opportunities for all.

Peter Cheese, Chief Executive of CIPD, the professional body for HR and Learning & Development professionals, said: "We share the Government’s ambition to raise employment standards and job quality through the Employment Rights Bill as part of the wider Make Work Pay agenda.

"The changes being proposed represent the greatest update in employment legislation in decades. We’re pleased to see the ongoing commitment from Government to engage with the business community to work through the important details to ensure they have a positive impact for both employers and workers.”

Jemima Olchawski, CEO of Fawcett Society, said: "Today’s draft employment bill is a win for women. Fawcett and our members have campaigned long and hard to see government chart a new course for inclusive economic growth and to improve women’s working lives. We share this government’s ambition to ensure all women can thrive at work and fully contribute to the economy.”

Mark Reynolds, Mace Group Chair and Chief Executive, said: "Ensuring British workers are supported with strong employment rights benefits everyone – employers as well as employees. This package of reforms is a welcome insight into the Government’s plans and show that they have engaged extensively with businesses and taken a pragmatic approach. We’re pleased to support it; both on behalf of Mace and the wider construction industry. We look forward to working closely with the Government as they take these plans forward.”

Kate Nicholls, CEO of UKHospitality, said: "I’m pleased the Government has recognised the importance of flexibility to both workers and businesses. This is crucial for hospitality, which employs 3.5m people and provides countless flexible roles for working parents, students, carers and many more.

"We look forward to continuing our engagement and consultation with the Government on its plans, which are not without cost, to get the details right for all parties.”

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