(This article is part of a three-part series exploring Labour’s Employment Rights Bill. This is Part 1, focusing on the key provisions of the bill.)
The Labour Party’s Employment Rights Bill is poised to bring sweeping changes to employment law in the UK. Announced in the King’s Speech in July 2024, the bill forms a crucial element of Labour’s “New Deal for Working People” and is expected to be introduced in Parliament within the first 100 days of a Labour government. This article delves into the core provisions of the bill and how these could reshape the employment landscape.
1. Establishment of a Fair Work Agency:
Labour plans to create a Fair Work Agency to coordinate efforts in enforcing employment law. The Single Enforcement Body will be empowered to undertake targeted and proactive enforcement actions, bringing civil proceedings to uphold employment rights. This could lead to an increase in claims as the Agency’s activities uncover and address systemic issues in workplaces.
2. Repeal of Trade Union Legislation:
The bill proposes to repeal trade union laws introduced by the previous government, including removing the requirement for minimum service levels during strikes. Labour also aims to simplify statutory recognition for unions and create a regulated pathway ensuring workers’ and union members’ access to union representation within workplaces.
3. Ban on Zero Hours Contracts:
Labour intends to ban zero-hours contracts and contracts without a guaranteed minimum number of hours. The bill will ensure that workers who have been on regular hours for 12 weeks or more are entitled to a regular contract. Additionally, it will mandate reasonable notice for shift changes and compensation for cancelled shifts.
4. Outlawing ‘Fire and Rehire’:
Following the introduction of the short-lived statutory Code of Practice on 18 July 2024, the bill will outlaw ‘fire and rehire’ practices by improving consultation procedures and reforming the statutory code. These changes aim to provide greater job security and could lead to an increase in unfair dismissal claims if employers fail to comply with the new requirements.
5. Expanded Unfair Dismissal Protections:
Labour plans to expand unfair dismissal protections by scrapping the two-year qualifying period and removing the statutory cap on compensation. While probation periods will remain, these changes are likely to result in more claims as employees gain easier access to legal recourse when employment is terminated in the first two years.
6. Strengthened Sick Pay Protections:
The bill will remove the lower earnings limit for statutory sick pay, making it available to all workers from day one. This could lead to more claims related to sick pay disputes, especially in industries with low-wage workers.
7. Flexible Working as Default:
Flexible working will become the default option for all workers from day one of employment. Employers will be required to accommodate this as far as reasonable. This shift could lead to disputes over what constitutes “reasonable accommodation” and potentially increase claims for breaches of employment rights.
8. Compressed Hours Proposal:
In a recent development, as reported by The Telegraph on 30 August, the Employment Rights Bill is also expected to include a provision for “compressed hours,” allowing employees to work their contracted hours over four days instead of five. Labour argues that this measure will boost productivity and help those with logistical and time constraints, such as parents, to stay in work. This could create new challenges for employers in terms of managing workloads, maintaining service levels, and addressing potential claims related to harassment or discrimination as a result of altered working patterns.
9. Protections for Pregnant Women:
The bill will enhance protections for pregnant women by making it unlawful to dismiss a woman while pregnant or for six months after her return to work, except in specific circumstances. This could lead to an increase in claims if employers fail to adhere to these enhanced protections.
Employment law in the UK is often highly influenced by the political climate. Historically, employment litigation tends to rise when a Labour government is in power due to the party’s focus on expanding worker rights and protections. As such, the anticipated increase in employment claims under the new Labour administration may reflect this trend.
Moreover, at the end of October, new rules introduced under the Conservative government will come into effect, imposing a duty on employers to prevent sexual harassment of employees. These rules are expected to lead to a rise in harassment claims as employers adjust to the new requirements.
In the next article, we will examine the bill’s introduction to Parliament and its journey through the legislative process.
For more information, please contact Natalie Larnder - Head of Market Affairs or Vanessa Lathum - Partner
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