Below is a summary of the new Employment Rights Bill, championed by Deputy Prime Minister Angela Rayner, aims to introduce significant changes to UK employment law, with implications for businesses of all sizes. However, the legislation is raising concerns due to its rushed nature and perceived bias towards large, unionized companies, potentially leaving small and micro businesses vulnerable.
Key points include:
- Bereavement Leave: Extension to cover all employees who lose a loved one, though many businesses already offer similar or better provisions.
- Unfair Dismissal: Day-one rights for protection from unfair dismissal could complicate dismissals during probation, while a proposed statutory 9-month probation period might provide a legal framework for terminating poor performers.
- Flexible Working: Employees will have the right to request flexible working from day one, making it the default. Businesses will need robust processes to defend any refusal of such requests.
- Parental and Paternity Leave: Increased rights for employees from day one, allowing them to request parental leave, potentially impacting business training and probation periods.
- Protection from Dismissal: Extended protections for pregnant employees and those returning from family leave may make it harder to manage poor performance or restructure businesses.
- Third-Party Harassment: Employers will face full liability for harassment by third parties, potentially challenging for businesses in industries like hospitality or care.
- Statutory Sick Pay (SSP): Reform to introduce SSP from day one and removal of the lower-earning limit could increase costs for employers, particularly small businesses.
- Zero-Hour Contracts: Proposals aim to reduce exploitative contracts by introducing guaranteed hours and notice requirements while preserving flexibility for workers who prefer it.
Many of these changes, including those affecting redundancy, equality action plans, and sector-wide collective bargaining, will require careful navigation by employers. Business owners are advised to audit their contracts, policies, and procedures to ensure compliance. It is anticipated that consultations will start in 2025 with implementation expected from 2026.
Business owners should consider their compliance strategies early, as the changes could have significant operational and financial impacts. While the Bill aims to protect workers, the balance appears heavily tilted in favour of employees, leaving employers with more responsibilities, increased costs and potential risks.
The Bill itself is 158 pages long. There is an explanatory note which, although easier to read, is 104 pages long. In addition, there is a 54 page Memorandum for the European Convention on Human Rights.
Consultation is planned for next year with much (although not all) of the implementation in 2026.
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