The publication of the Employment Rights Bill 2024 is a milestone for the government; they’re making steps towards their target of making the UK economy work better for working people.
These proposals aim to modernise the UK's employment rights framework.
Proposals include:
- Making flexible working the default
- Establishing a new right to bereavement leave
- Making paternity and parental leave available from day one of starting a new job
- Strengthening the protections for pregnant women and new mothers returning to work
The bill is looking to repeal the Strikes (Minimum Service Levels) Act 2023, which was recently introduced.
The delivery of the Plan to Make Work Pay will be approached in phases.
In July, the Low Pay Commission’s remit was adjusted to ensure cost of living is factored into decisions on minimum wage rates. Discriminatory age bands will also be removed.
In September, the government announced plans to protect the self-employed from late payments, including a new Fair Payment Code and regulations to capture late payment information within large companies’ annual reports.
Employment Rights Bill 2024
The Employment Rights Bill 2024 is the first stage of delivering the government’s Plan to Make Work Pay, supporting employers, workers and unions in moving Britain forward and fulfilling a commitment to introduce legislation within 100 days.
The bill will bring forward policy measures including:
- ‘Day one rights’ of employment, including:
- Entitlement to paternity leave
- Unpaid parental leave
- Protection from unfair dismissal while allowing employers probation periods
- Establishing bereavement leave
- Making flexible working the default
- Banning exploitative zero-hours contracts
- Abolishing fire and rehire
- Strengthening provisions on collective redundancy
- Establishing the Fair Work Agency
- Measures to modernise trade union laws
- Improving pay and conditions via a Fair Pay Agreement in adult social care
- Re-establishing the School Support Staff Negotiating Body
- Re-instating the two-tier code for procurement
- Increasing protection from sexual harassment
- Introducing gender and menopause action plans
- Strengthening rights for pregnant workers
- Strengthening Statutory Sick Pay (SSP)
Consultations
The government has committed to various consultations which are likely to mean that there will be amendments to the bill as it progresses and before it becomes an act (legislation).
Consultations are expected to take place during 2025, so it’s anticipated that the majority of reforms won’t become effective any earlier than 2026.
Reforms of unfair dismissal will not take effect earlier than autumn 2026.
Further detail on many of the policies in the bill will be provided through regulations and, in some cases, codes of practice, after Royal Assent.
The consultations include:
- The percentage replacement rate for employees earning below the flat rate of SSP
- Zero-hours contracts and how they’re effectively and appropriately applied to agency workers
- Reforms to modernise and update trade union laws so they’re fit for the modern economy
Please note that employment rights and industrial relations are reserved in relation to Scotland and Wales and transferred to Northern Ireland. The UK government will work closely with the devolved governments on the delivery and implementation of the Plan to Make Work Pay.
Family-friendly rights
The Plan to Make Work Pay aims to provide more flexibility and security for working families. It’ll support workers to work whilst also undertaking other essential responsibilities such as raising children, improving their own wellbeing or caring for a loved one with a long-term health condition.
There will be a number of immediate changes, including:
- Making flexible working the default
- Establishing a new right to bereavement leave
- Making paternity and parental leave a day one right
- Strengthening protections for pregnant women and new mothers returning to work
Changes to flexible working legislation looking to ensure more requests are agreed will be developed in consultation and partnership with business, trade union and third sector bodies.
There’ll also be a review of the current parental leave system and will consult with workers and employers on how to deliver changes.
And there’ll be a review of the implementation of carer’s leave to consider if a change is required.
Fair pay
The government has changed the remit of the independent Low Pay Commission so that it’ll now consider of the cost of living.
National minimum wage will have the age bands removed so that every adult is entitled to the same minimum wage.
SSP will be improved by removing the lower earnings limit, making it available to those earning below this amount. Additionally, the waiting period before SSP is due will be removed.
For the adult social care sector the government plans to propose a framework for a Fair Pay Agreement process, allowing the negotiation of fair pay, terms and conditions, and training standards.
A consultation will be opened to consider how the Fair Pay Agreement should work.
Flexibility
The plan aims to improve one-sided flexibility. This includes banning exploitative zero-hours contracts, ending fire and rehire and making unfair dismissal protection a right from day one for all employees. Along with this, legislation will be introduced to cover fair and proportionate processes for dismissal in initial periods of employment.
The government is looking to consult on moving towards a single status of worker. Part of this consultation will also look at how to enhance protections for self-employed workers.
Zero-hours contracts
The plans to remove exploitative zero-hours contracts include giving workers on zero-hours contracts and workers with a ‘low’ number of guaranteed hours, when they regularly work above these hours, the ability to move to guaranteed-hours contracts. They’ll reflect the hours they regularly work over a 12-week reference period. They’ll also include regular reference review periods, providing workers the opportunity to include any increases in hours to their contracts.
Consultations with employers and trade unions will look at how subsequent review periods should work and what constitutes low hours before they are set via regulations. This aims to ensure they’re reasonable and proportionate for both workers and employers.
There’ll also be a requirement for workers to receive a reasonable notice of any changes in shifts or working time, with proportionate compensation for any shifts cancelled or curtailed at short notice.
These measures will be adapted and applied to agency workers with additional consultation on the best way to achieve this.
The government will also ensure that workers on full-time contracts who occasionally pick up overtime hours are not affected. When work is genuinely temporary, there’ll be no expectation on employers to offer permanent contracts. Other ways that employers might try to avoid the measures have been considered and addressed in the bill.
While zero-hours contracts work well for some, including students and those with caring responsibilities. They’ll be able remain on zero-hours contracts if they wish.
Fire and rehire/replace
The Employment Rights Bill reforms legislation by providing effective remedies to stop fire and rehire/replace practices, while still allowing businesses the opportunity to restructure to remain viable, preserving their workforce and the company when there is genuinely no alternative.
Consultation will be taken on removing the cap of the protective award, where an employer is found to not have followed the collective redundancy process, and on what role interim relief could play in protecting workers in these situations.
As part of reform there’ll also be measures introducing powers to allow the UK to:
- Strengthen workers’ rights at sea
- Implement international conventions relating to seafarer employment, which will be added to the bill via amendment during bill passage
- Extend the time limit for bringing claims to employment tribunals
The bill removes the two-year qualifying period for protection from unfair dismissal moving this protection to a day one right. Fair dismissal won’t be prevented. The bill allows employers to operate probationary periods by providing an initial period during which there will be a lighter-touch process to follow when dismissing an employee who’s not right for the job.
Consultation will be held on the length of the initial statutory probation period, with the government’s preference being nine months. Consultation will continue during the passage of the bill, ensuring the probation period has meaningful safeguards to provide stability and security for business and workers.
The introduction of a statutory probation period will set out a new balance for the early months of a job, providing new legally binding rights for employees from day one. The government is suggesting that employers should hold meetings with employees to explain the concerns about their performance. At this time, an employee can choose to be accompanied by a trade union representative or a colleague.
Extensive consultations will be held on these changes, including on how they interact with the Acas Code of Practice on disciplinary and grievance procedures. Existing day-one rights that provide protection for employees from unfair dismissal won’t be affected by the statutory probation period. The government plans to identify ways to signpost and support employees to ensure they have proper recourse if they’re unfairly dismissed, and make it clear when bringing claims might be unsuccessful.
The government also intends to consult on a compensation regime for successful claims during the probation period, with tribunals not able to award the full compensatory damages currently available.
Before any measures come into force there’ll be a substantial period, once the detailed rules in secondary regulations are confirmed, to allow employers to prepare and adapt.
The reforms to unfair dismissal won’t come into effect any earlier than autumn 2026. Until then the current qualifying period will continue to apply.
Equality at work
The Plan to Make Work Pay will make the right to equal pay effective by putting in place measures to ensure that outsourcing services can’t be used by employers to avoid paying equal pay. A regulatory and enforcement unit for equal pay will be introduced.
Gender pay gap action plans will be introduced. So will a requirement for larger companies to publish information on their ethnicity and disability pay gaps.
Large employers will be required to produce action plans on how to address their gender pay gaps and on how they’ll support employees through menopause. This will be supported by the introduction of a Regulatory Enforcement Unit for equal pay.
The government will also increase protections for pregnant workers, making it unlawful to dismiss them within six months of their return to work, except in specific circumstances.
Enforcing rights at work
A Fair Work Agency will be established. It’ll bring together existing enforcement functions, including:
- Minimum wage and SSP enforcement
- The employment tribunal penalty scheme
- Labour exploitation and modern slavery
- The enforcement of holiday pay policy
The body will take a balanced approach to upholding workers’ rights, with better support for most employers who want to comply with the law and tough action against the minority who don’t.
Trade unions
The government is committed to updating trade union legislation, removing unnecessary restrictions on trade union activity and ensuring industrial relations are based around good faith negotiation and bargaining.
There’ll be consultation to modernise the legislative framework that underpins trade unions. Legislation that has led to an overly conflictual approach to industrial relations will be repealed. Views on several measures to update and reform this framework to hardwire negotiation, engagement and dispute resolution will be sought. In particular, on measures to remove the ballot requirement on political funds and simplify the amount of information unions are required to provide in industrial action notices, and on how to strengthen provisions to prevent unfair practices during the trade union recognition process.
The government has already committed to repealing ineffective anti-union legislation, including the Strikes (Minimum Service Levels) Act 2023 and including prohibiting employers from providing agency workers to cover the duties normally performed by a worker who’s taking part in a strike or other industrial action.
There’s also the intention to simplify the union recognition process, including a new right of access, transparent framework and clear rules designed in consultation with unions and business – for union officials to meet, represent, recruit and organise members.
This won’t impact the trade union’s existing collective agreements on access with employers. The government is committed to working with stakeholders to ensure the new right of access is effectively enforced.
These consultations will require amendments to the bill as it progresses.
Reforms outside of the Employment Rights Bill 2024
While the Employment Rights Bill 2024 will play a vital role in delivering many changes, others will be delivered through alternative routes.
For many of the commitments to Make Work Pay, powers already exist to deliver the required reforms and don’t need to be included in the bill. This includes tightening the ban on unpaid internships. There’ll be a Call for Evidence by the end of 2024.
A working group with stakeholders will be launched by the end of 2024, including cyber security experts and trade unions, to review the use of modern and secure electronics balloting for trade union statutory ballots. A full rollout will be implemented following Royal Assent of the Employment Rights Bill.
Using the new Fair Payment Code, actions will be taken to strengthen protections for the self-employed by tackling late payments and progress commitments on paid travel time.
The government will also be able to deliver some reforms through other means, such as moving forward with the Right to Switch Off through a statutory Code of Practice. Delivery of these type of commitments will take place alongside the Employment Rights Bill 2024’s passage and beyond Royal Assent.
Other non-legislative delivery includes:
- Removing the age bands to ensure every adult worker benefits from a genuine living wage
- Supporting workers with a terminal illness through the Dying to Work Charter
- Modernising health and safety guidance
- Enacting the socioeconomic duty
- Ensuring the Public Sector Equality Duty provisions cover all parties exercising public functions
- Developing menopause guidance for employers and guidance on health and wellbeing
Equality (Race and Disability) Bill – autumn 2024 onwards
Some measures will be also delivered through the government’s Equality (Race and Disability) Bill, such as:
- Extending pay gap reporting to ethnicity and disability for employers with more than 250 staff and measures on equal pay
- Extending equal pay rights to protect workers suffering discrimination on the basis of race or disability
- Ensuring that outsourcing services can’t be used by employers to avoid paying equal pay
- Implementing a regulatory and enforcement unit for equal pay with involvement from trade unions
The government will consult on this legislation in due course, with a draft bill to be published during the parliamentary session for pre-legislative scrutiny.
Further consultation will also take place prior to the secondary legislation implementing these reforms.
Longer-term delivery of reforms – autumn 2024 onwards
The government acknowledges that some reforms will take longer to undertake and implement, including:
1. Parental leave review
The current parental leave system doesn’t support working parents. Alongside provisions in the Employment Rights Bill 2024 to ensure parental leave is a right from day one of employment, a full review of the parental leave system will take place.
2. Carer’s leave review
The implementation of carer’s leave will be reviewed and will examine all the benefits of introducing paid carer’s leave, while considering the impact of any changes on employers – particularly small employers.
3. Surveillance technologies and negotiations with trade unions and staff representatives
Consultation will take place on how to implement measures around workplace surveillance technologies.
4. Protections for the self-employed
These can be improved through a right to written contract, extending blacklisting protections and health and safety protections. There’ll also be consultation on how to implement these measures in the single ‘worker’ status consultation.
5. Transfer of Undertakings (Protection of Employment) (TUPE)
There’ll be a call for evidence to examine a wide variety of issues relating to TUPE regulations and processes, including how they’re implemented in practice.
6. Review health and safety guidance and regulations
The government is looking at:
- Modernising legislation and guidance
- Neurodiversity awareness in the workplace
- How to modernise health and safety guidance with reference to extreme temperatures
- Reviewing whether existing regulations and guidance are adequate to support and protect those experiencing the symptoms of long COVID
- Ensure health and safety reflects the diversity of the workforce
This review will be actioned in due course.
7. Collective grievances
Consultation with Acas will take place, enabling employees to collectively raise grievances about conduct in their place of work.
8. Social values
This is to:
- Ensure social value is mandatory in contract design
- Use public procurement to raise standards on employment rights
- Ensure that public bodies must carry out a quick and proportionate public interest test
The government will take these forward alongside wider plans to reform the procurement system, starting with a new National Procurement Policy Statement ahead of the commencement of the 2023 Procurement Act in February 2025.
9. Freedom of Information Act
The government has plans to extend the Freedom of Information Act to private companies that hold public contracts and to publicly funded employers. More information will be made available in due course.
10. Misc.
The government will take the following proposals forward in due course:
- Single status of Worker – consultation on a simpler framework that differentiates between workers and the genuinely self-employed
- Simpler two-part framework for employment status
- Right to Disconnect – this is likely to be a Code of Practice
Please note that at the time of writing this bill is not legislation but proposals and plans to consult.
We can help you stay up to date with all the latest on the Employment Rights Bill 2024. Get in touch to see how or download our brochure to learn more about our services.
About the author
Claire Warner FCIPP is Ciphr’s regulatory analyst, and one of our team of payroll experts. She says: “Having ‘fallen’ into payroll like so many others, I’ve worked in the profession for over 40 years in multiple roles. This includes running payrolls in various industry sectors and working with software houses to develop software and implement systems for client. I’ve also designed and delivered professional training and qualifications, and sessions, conferences and webinars on various payroll-related subjects. I now use this knowledge and love of payroll and the legislation that impacts it to help guide, inform and support others within the profession.”