What does the new UK Employment Rights Bill mean for workers and employers?

By Dr. Tim Sandle
October 23, 2024
DIGITAL JOURNAL

Prime Minister Keir Starmer wants to boost skills of UK workers - Copyright AFP/File ADEK BERRY

The UK Labour government’s Employment Rights Bill was presented on 10th October 2024 to Parliament. On launching the bill, Angela Rayner, the deputy prime minister and housing secretary, has said the employment rights bill will be good for growth.

Speaking during the opening of its second reading debate, she said an impact assessment published by the government has made it clear the bill will have “a positive impact on growth and more than 10 million workers will benefit from Labour’s plan in every corner of this country”.

The opposition Conservative Party reverted to type, showing their true colours when it comes to rights at work. Despite overwhelming public support for stronger workers’ rights, the Tories attempted to block the Employment Rights Bill by not only by voting against it, but also tabling a wrecking amendment to stop the Bill in its tracks.

While the bill has disappointed many trade unionists in its timidity, there remain aspects that employers need to be aware of. In particular, the rules around zero hours contracts will change. A zero-hour contract is a type of employment contract in UK labour law, between an employer and an employee whereby the employer is not obliged to provide any minimum number of working hours to the employee.

Trade unionists maintain that zero-hours contracts hand the employer total control over workers’ hours and earning power, and hence they should be scrapped. Starmer’s government has not gone this far, although there are some progressive reforms.

Looking at some of the bill’s measures is Rufus Hood, Country Manager UK at digital staffing agency Coople.

Hood begins by cautioning, as is common with the legislative process, that the law that is finally passed will differ from the current contents of the bill as various amendments are made at the committee stage. Hood notes: “The government’s new Employment Rights Bill was presented to Parliament on 10 October. Rather than this being the version that is passed into law, it’s highly likely that some parts of it will be amended.”

It is also noticeable that statements made by politicians during the summer 2024 General Election have not ended up in the bill. Here Hood observes: “Some of the measures the government has previously mentioned would form part of the Bill were not included, such as the ‘right to switch off’ which will now likely be guidance rather than legislation.”

Some of the changes will impact employers. Drawing this out, Hood says: “Employers will need to be aware of the changes to employment legislation that are on the horizon, to make sure that they remain compliant with the law. They might also need to be aware of any increased costs they might incur. For instance, it has been proposed that employers will pay a set charge to zero-hour and irregular hour workers if a shift is cancelled at short notice. Costs to pay staff who are on leave will also increase, as employees will now be entitled to more types of leave from day one of their employment.”

With timelines, Hood states: “Much of the new legislation is expected to come into play in 2026, meaning businesses have some time to prepare. In order to get ahead of these changes, employers should review the bill and conduct an assessment to see what the impact will be, especially of the policies that seem most likely to become legislation.”

The measures could have a concentrated effect in specific sectors. Hood thinks: “Certain industries may be affected by particular changes – for instance, hospitality is currently quite reliant on zero-hour workers. According to the latest data from the Office for National Statistics, 32 percent of hospitality staff are on zero-hour contracts.”

As a consequence, Hood recommends: “HR managers should begin reviewing policy documents and updating their processes. Line managers should be trained on requests that might be made to them by staff exercising their new rights.”

In terms of the specifics, Hood maps out: “The government has provided more details about the proposed new restrictions on zero-hour contracts. Workers on zero-hour contracts, or very low contracted hours, will be given the right to move to a new contract that more accurately reflects the hours they work. Employers will offer the set hours contract periodically, calculated looking back over how many hours the employee recently worked on average. Some aspects of this legislation are yet to be determined through a consultation process, including what this will mean for agency workers – consultation is expected to begin soon.”

In terms of other key changes: “Several new rights for workers have been proposed that would begin from day one of employment, including paternity leave and unpaid parental leave, as well as the right to request flexible working. Statutory Sick Pay will be available from day one, and it will also now be available to workers on lower earnings as the previous Lower Earnings Limit will be scrapped.”