UPDATED: The Labour government has tabled amendments to its upcoming Employment Rights Bill.
There are reportedly 250 additions to the bill, which was announced back in October 2024.
The government has outlined that agency workers will need to be compensated if their shift is cancelled or changed at short notice (though ambiguity hangs around the term ‘short notice’). On top of that, employers will have to give agency workers new contracts outlining their fixed working hours per week.
Firing and rehiring practices and firing and replacing practices will be punished more harshly with a double penalty. Employers may also be forced to pay 180 days’ compensation rather than the current 90 days.
Day one rights for employees will progress further, with staff being entitled to parental leave, sick pay and protection from unfair dismissal from their first day. Plus, new mums will have protection from dismissal for their first six months after they return to work.
Probation is more likely to be set at nine months rather than the six months that trade unions wanted.
Workers who are operating through an umbrella company could be getting the same rights and protections as those working through a recruitment agency. What’s more, action can be taken against umbrella companies that don’t comply.
The absence of one proposal has been noted, namely the right to switch off. A government source told The Times: “We have to lower business compliance costs as much as possible.”
Some of the proposed measures in the original bill are as follows:
- The two-year qualifying period for unfair dismissal will be scrapped. Instead, employees will have protection from day one on the job
- Consultations will take place on a statutory probation period for new hires (nine months is being proposed). The idea is to allow proper suitability for the role while giving employees reassurance from their first day
- Flexible working will be the default where practical
- Employers will be required to create action plans on addressing gender pay gaps and supporting employees through the menopause, as well as protections against dismissal for expectant and new mothers
- A new Fair Work Agency will be introduced, combining existing enforcement bodies to make sure employees get holiday pay and allow business owners to seek help with the new rules
Mixed responses
As predicted, there has been mixed responses to what a a rather controversial bill. We’ve included a small sample below.
Tina McKenzie, policy chair of the Federation of Small Businesses (FSB), said:
“The government has missed an opportunity today to intervene and help businesses cope with Make Work Pay. It needs to focus more on building up businesses’ confidence to hire and grow.
“Ministers must put the work in and understand the damage that taking such a threatening approach to hundreds of thousands of small employers will do.
“The chief concerns among small businesses remain the threat of being taken to court as soon as they take a risk hiring someone, the affordability of proposals on sick pay, and the sheer unworkability of other parts of this mass of complex new rules.
“We hope the government will move from asserting that these changes are pro-business to making that a reality.”
Jane Gratton, Deputy Director of Public Policy at the BCC, said:
“Employers will be relieved to see some amendments, at what is clearly a milestone moment for Government. It has consulted business – and this is reflected in some of the decisions on the future shape of the legislation. There is much here to welcome as sensible moves that will help ensure that employment works for both the business and the individual, including the nine-month statutory probation period and the promise of a light touch approach, as well as simplifying rules on collective consultation.
“But businesses remain cautious, and it is important to continue ensuring the Bill strikes the right balance. Employers will look forward to hearing, engaging with and shaping further detail. The government must continue its positive approach to engagement with firms and remain open to changes. Doing so will ensure this legislation is proportionate, affordable, and right for both firms and their employees.”
Julie Abraham, CEO of Richer Sounds said:
“At Richer Sounds, we have always put the treatment and wellbeing of our colleagues at the forefront of everything we do. Any responsible business will know that well-treated and well-paid colleagues will be beneficial in numerous ways.
“Happy colleagues are likely to be more productive. This also leads to reduced stock loss and higher staff retention, which in turn, minimises recruitment and training costs, not to mention disruption to established teams. We support any government legislation that will help end exploitative working practices and improve the lives of working people.”
Neil Carberry, CEO of Recruitment & Employment Confederation, said:
“Regulating the umbrella market closes a loophole in addressing non-compliance. Recruiters have long called for regulations that ensure a level playing-field. Like all aspects of the Government’s changes, proper enforcement will be key to protecting both businesses and workers.”
Find out more details on the tabled amendments at the government website.
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