One of the key pledges in the Labour Party manifesto was to deliver a ‘New Deal for Working People’. The first steps towards this were taken in the King’s Speech on 17 July, which included a pledge to introduce a new Employment Rights Bill.
Why is the new Bill needed?
The Government believes that Britain’s current employment laws are not fit for the modern economy.
The briefing note accompanying the King’s Speech notes that, whilst the UK typically ranks highly in international indicators of labour market flexibility, there has been an increase in the number of people in less secure forms of work over the last decade.
In addition, although overall employment levels are high, this has not led to an increase in productivity or earnings. Since the 2007 financial crash, UK productivity growth has been lower than the G7 average.
The Government believe that extending worker protections will help to boost earnings, encourage more workers to switch jobs, and protect the lowest paid.
What will the new Bill cover?
The new Bill is a key part of the Government’s commitment to ‘make work pay’ and introduce a ‘new deal’ for working people. It focuses on a number of areas, including banning employment practices which the Government view as exploitative and enhancing workers’ rights.
Changes proposed include:
- A ban on zero-hour contracts - workers will have a right to a contract that reflects the number of hours they regularly work and to receive reasonable notice of any changes in shift arrangements, with compensation payable as appropriate.
- Ending the practices of ‘Fire and Rehire’ and ‘Fire and Replace’
- Making parental leave, sick pay and protection from unfair dismissal a right from day one for all workers.
- Removing the lower earnings limit and waiting period from Statutory Sick Pay, making it available to all workers.
- Making flexible working the default from day one for all workers, with employers required to accommodate this as far as is reasonable.
- Strengthening protections for new mothers by making it unlawful to dismiss them within six months of returning to work, except in specific circumstances.
- Establishing a new Single Enforcement Body or ‘Fair Work Agency’ to strengthen enforcement of workplace rights.
- Updating trade union legislation and removing the ‘minimum service level’ restrictions introduced by the previous Government.
- Ensuring workers have a reasonable right to access a union.
Taken together, the Government believes this will represent the biggest upgrade to workers’ rights in a generation.
Next steps
The King’s Speech indicates that the Bill will be delivered ‘in the first one hundred days’ of the new Government. However, the exact date from which any of the proposed changes will take effect is not yet known.
The Bill will also only apply to Great Britain – i.e. in Wales, Scotland and England. It remains to be seen whether or when equivalent measures will be introduced in Northern Ireland.
This article reflects the position at the date of publication shown above. If you are reading this at a later date you are advised to check that that position has not changed in the time since.
We regularly publish articles on a range of tax and wider topical issues which affect employers. If you wish to subscribe to our monthly Employer Focus e-newsletter, please contact us.