New Employment Rights Bill aims to transform worker protections

Today is budget day in the UK. Many are waiting with bated breath to hear how Chancellor Reeves’ announcements will impact both individuals and employers. Especially since the recently introduced Employment Rights Bill demonstrates that the Government is not afraid to set the wheels in motion for transformative change.

The Employment Rights Bill marks a groundbreaking step forward for worker protections in the UK, offering a suite of changes aimed at strengthening employee rights, addressing exploitative work practices, and ensuring greater financial stability for workers across various industries.

Legal experts believe these changes could reshape the employment landscape and potentially tilt the balance of power more equitably between employers and their employees.

Financial stability for expectant mothers and enhanced family leave

One of the most significant aspects of the Bill is its proposal to make maternity pay a “day one” right, eliminating the current six-month minimum employment requirement. Jasmin Dhillon, Employment Partner at Spencer West LLP, highlights this development as a crucial win for expectant mothers. She notes that it could significantly reduce financial strain during pregnancy, particularly given the rising cost of living.

In addition to maternity pay, the Bill includes enhanced family leave protections, extending rights to paternity, unpaid parental, and bereavement leave from the first day of employment. While the full implementation of these proposals may not occur until 2026, the move signifies a strong commitment to promoting family-friendly workplace policies that allow families a better chance at achieving work-life balance.

Strengthening worker rights in zero-hours contracts

The Bill also takes aim at zero-hours contracts, which have long been a controversial feature in the labour market due to the lack of guaranteed work hours. Dhillon points out that while flexible work arrangements can be beneficial, the unpredictability of zero-hours contracts often leaves workers in financial insecurity. Under the new Bill, employees on such contracts will have improved stability, with new measures aimed at preventing employers from using exploitative scheduling practices, thereby allowing workers to better plan their finances and personal lives.

Revamping sick pay eligibility

Another critical provision of the Employment Rights Bill is its expansion of statutory sick pay. For many low-wage and insecure job holders, current sick pay eligibility is restrictive, sometimes compelling workers to work while ill to avoid losing income. Under the new Bill, statutory sick pay would become a “day one” right, scrapping the minimum earnings requirement and making it available from the first day of illness. Although the proposed changes don’t specify whether the amount of statutory sick pay will increase, the broader eligibility would nonetheless prevent many workers from facing financial hardship during illness.

Other key provisions: unfair dismissal, flexible working, and minimum wage reform

The Bill also seeks to provide protection from unfair dismissal from the first day of employment, a substantial change from the current two-year qualifying period. According to Brigitte Weaver, Employment Lawyer at Katten Muchin Rosenman LLP, this adjustment would coincide with a nine-month probation period for new hires, during which employers would have a “lighter touch” approach in assessing new employees’ fit for their roles. However, it remains unclear how this probationary flexibility will be managed in practice.

Flexible working is another area seeing substantial reform, as the Bill aims to make flexible arrangements the default wherever feasible. While the specifics of this shift are yet to be clarified, the government has promised that guidance will accompany the changes. Additionally, the Bill introduces measures to support women in the workplace by establishing statutory protection from dismissal during pregnancy, maternity leave, and the six months following their return.

In a first for minimum wage policy, the government intends to factor in the cost of living when setting rates, with a notable reform of age-based pay bands that currently reduce wages for younger employees.

Additional provisions and the “Fair Work Agency”

The Bill introduces further proposals, including bans on zero-hours contracts, “fire and rehire” practices, and a requirement for companies to address gender pay gaps and menopause support. Additionally, an enforcement body called the “Fair Work Agency” will be established to oversee holiday pay, minimum wage compliance, and other rights.

These sweeping changes represent a significant overhaul in the realm of employment rights, and while they await enactment, experts advise that the practical application of these laws will depend on the details and timing of their rollout. Nevertheless, if the Employment Rights Bill passes in its current form, it could set new standards for fair treatment, financial stability, and workplace protections across the UK.

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