What does the Employment Rights Bill mean for you? | Sector Reaction

Our Employment Rights Bill will ban exploitative zero-hours contracts, end fire and rehire, and introduce basic employment rights from day one.

We’re introducing new workplace rights to end unfair employment practices and help deliver economic growth.  

Our Employment Rights Bill will ban exploitative zero-hours contracts, end fire and rehire, and introduce basic employment rights from day one – like paternity and parental leave, and protection from unfair dismissal. It also introduces right to bereavement leave from day one. 

It will replace out-of-date employment laws, helping to boost pay and productivity with legislation fit for a modern economy.  

This is the biggest upgrade to workers’ rights in a generation, and a significant step towards delivering this government’s plan to make work pay.   

Basic rights from day one  

We’re putting in place measures to give employees basic rights from their first day in a new job.   

Our new Bill will give greater protection against unfair dismissal from day one, ensuring that the feeling of security at work is no longer a luxury for the privileged few.  

We are also bringing in a new statutory probation period for companies’ new hires. This will allow for a proper assessment of an employee’s suitability for a role as well as reassuring employees that they have rights from day one. We will consult on the length of the period; the government’s preference is 9 months. 

The Bill will establish rights to bereavement and paternity and parental leave from day one, and strengthen statutory sick pay, removing the lower earnings limit for all workers and cutting out the waiting period before sick pay kicks in.

Our new Bill and measures will:   

• Give protection against unfair dismissal from day one, while allowing employers to operate probation periods
• Establish parental and bereavement leave from day one  
• End exploitative zero hour contracts   
• End unscrupulous practices of fire and rehire and fire and replace  
• Make flexible working the norm where practical  
• Deliver stronger dismissal protections for pregnant women and new mothers  
• Establish a new Fair Work Agency with new powers to enforce holiday pay  
• Strengthen statutory sick pay

Ending unfair practices   

Our new laws will end exploitative zero hours contracts and unscrupulous fire and rehire practices.   

While workers can stay on zero hours contracts if they’d prefer to, our new Bill means they’ll have the right to a guaranteed hours contract if they work regular hours over a defined period.   

Ending unscrupulous employment practices is a priority for this government. And this Bill will shut down the loopholes that allow bullying fire and rehire and fire and replace to continue.   

A fairer and more flexible workplace   

As part of the Bill, we’ll introduce new measures to help make the workplace more compatible with people’s lives. This includes making flexible working the default where practical.   

Large employers will be required to create action addressing gender equality, including supporting employees through the menopause, and protections against dismissal will be strengthened for pregnant workers and those returning from maternity leave.   

This is all with the intention of keeping people in jobs for longer, reducing recruitment costs for employers by increasing staff retention and helping the economy grow.  

We’ll also establish a new Fair Work Agency bringing together existing enforcement bodies to enforce rights such as holiday pay, and support employers looking for guidance on how to comply with the law.

Sector Reaction

David Hughes, Chief Executive, Association of Colleges, said:

“We support the proposals to strengthen workers’ rights in the Employment Rights Bill introduced today. Colleges are responsible employers who strive to create supportive and fair workplaces, with a strong emphasis on wellbeing, inclusion, and work-life balance.

“We know that college employment policies are often driven by the way they are funded and regulated and the way that the education system is organised. For example, colleges sometimes use zero-hour contracts because they cannot predict workload which, in turn, is a function of the timing of exam results in late August and more generally because of the individualised, activity-based funding of apprenticeships, high needs and other areas which makes it hard to predict teaching, training and teaching support workloads.

“At AoC, we will be going through the proposals in detail, working with members, unions and our employment advisors to see what the impact will be on colleges, and what further investment will be needed to ensure they can abide by the new legislation.”

Neil Carberry, REC Chief Executive, said: 

“Businesses can finally see the path ahead for this government on employment rights today. There is good news in the timescale for delivery, and in the commitment to consultation, as much of the most important detail is yet to be worked out. This should calm business fears for now – but it does not take away from the need to ensure that we strike the pro-business, pro-worker balance that the government wants. Nothing is more pro-worker than a labour market where businesses have the confidence to invest and create jobs. A strong floor of well-enforced rights is essential in work, but so is job creation. We will judge this government on how it delivers both of these goals, with workforce and productivity at the heart of its industrial strategy.” 

“Far too much is made of zero-hour contracts as being imposed on workers when there is more than enough evidence that people want to work in different ways. The measures in the Bill are targeted, and we welcome the rejection of a ban on these contracts. But even the suggested approach could cause significant challenges if applied without understanding of workers’ varied needs. Carving out space to consult on the specific needs of agency workers is good news – reducing opportunities for people who want flexible work would be a grave mistake. 

“The nine months’ probation period that follows a job start should allow for an employer to see if things will work out. We would have preferred a longer period – to protect smaller firms. But the real test is the process firms have to follow to dismiss. It is good that it is to be simplified – but will it be simple enough for even the smallest firms to follow?  If it is not, firms may be less likely to take a chance on someone. 

“Day One sick pay is a concern for flexible work, as workers will not need to have been on site for any period of time before calling in sick. For agencies who have to meet that cost, building client understanding that this is part of their fee is necessary. Agencies say they will need government support to educate clients on the need to accept rises in NMW and areas like sick pay. 

“The decision not to rush the plans to define a single status of worker shows a government that gets how complex and difficult it is to make this work. The REC will continue to make the strong case for why this will not work, and that the UK’s dual status system is well-suited to the labour market we have today. Other countries look to us for a model in how to protect gig workers – why would be ditch it?”  

CBI CEO Rain Newton-Smith said:

“Politicians and businesses have a shared goal in wanting to raise living standards through higher levels of growth underpinned by investment and increased productivity.

“The government deserves credit for its willingness to engage with businesses and unions on how to make a success of the Plan to Make Work Pay.

“It’s that willingness to work together that can ensure we find the right landing zone and improve living standards by avoiding the unintended consequences that businesses have warned against.

“With a number of critical details still subject to consultation, it’s important the government builds on the good engagement to date to ensure we get the detail right on this decisive piece of legislation.”