Employment Rights Bill 2024 and the labour industry

The Employment Rights Bill introduced to Parliament by the new Labour Government on 10^th October builds upon the existing Employment Rights Act of 1996, introduced by the Conservative government.

The Bill is a significant piece of legislation with more than 150 pages and 28 reforms, probably far more than commentators and business were expecting. It now must make its way through Parliament and some proposals will undergo scrutiny through public consultation. The likelihood is that, although some measures may take effect soon, some will probably come into force in 2025 and others in 2026.  

Alongside the Bill itself, the Government published a policy paper titled ‘Next Steps to Make Work Pay.’ This document, premised on the pre-election ‘Make Work Pay’ proposition, sets out the Government’s vision for the future of work and is a useful indicator of what may lie ahead, although many of its objectives lie outside the scope of the Employment Rights Bill.

An overview of the key elements of the draft Bill

• Zero hours working: The Bill contains complex measures which give workers on zero or low hours contracts the right to move to a guaranteed contract that reflects the hours they actually work. Anti-avoidance rules are included. Consultation is planned on the meaning of low hours and how the new legislation can be applied to agency workers.
• Right to flexible working: The right to request flexible working is to be made a default entitlement from the first day of employment.
• Statutory sick pay: Payable from day 1 (currently day 4) and removal of the lower earnings limit so that low earners qualify for Statutory Sick Pay.
• Extension of maternity protections: Changes include an entitlement to maternity pay from day 1.
• Entitlements to leave: Another change to day 1 entitlement for unpaid parental leave, paternity leave and a new statutory bereavement leave scheme for all employees.
• Dismissal: A day 1 right to claim unfair dismissal, Consultation is to follow on the nature of an employer’s right to apply a ‘light touch’ dismissal and is likely to incorporate a statutory probation period.

There are also sections concerning:

• Changes to procedures for handling redundancies: Changes to the infamous ‘Fire & Rehire’ processes which can be used. Proposals intended to severely restrict occasions where it can be used – effectively only when facing an existential threat to the business. Collective consultation obligations in the event of redundancies triggered by 20 or more redundancies across a whole organisation rather than just one site.
• Protection of public sector workers where outsourcing is contemplated: Rules to be followed and criteria to be met before any outsourcing of contracts involving potential loss of jobs.
• Duties of employers relating to equality: Large employers may be required to produce equality action plans based on gender (including gender pay gap).
• Pay and conditions of school support staff in England: Proposals for the establishment of a School Support Staff Negotiating Body to oversee Fair Pay Agreements in the sector.
• Creation of an Adult Social Care Negotiating body, its remit and powers: To oversee the remuneration, terms and conditions of Social Care workers.
• Trade Unions and industrial action: The Bill contains details of enhanced Trade Union rights and includes proposals to ‘modernise’ Trade Union laws and remove conflict in labour disputes. Further detailed consultation can be expected.
• Enforcement of labour market legislation: The Fair Work Agency. Includes the creation of an Advisory Board and the powers of reporting and use of Labour Market Enforcement orders including entities covered by the Employment Agencies Act 1973, National Minimum Wage Act 1998, Working Time Regulations 1998, Gangmasters (Licensing) Act 2004 and Modern Slavery Act 2015. A significant part of the Bill is devoted to this objective. Further detail and consultations will follow.
  
  

A consultative approach has been promised

These key policy proposals are clearly complex. The line-by-line scrutiny that this kind of legislation faces before passing into law, both via the House of Commons and the House of Lords leaves it open to amendment, so what we read now is not necessarily exactly what we will see in the Act itself.

We understand that the various consultations referred to will begin shortly and this is the chance that the industry has to voice its views. 

The consultations on zero hours contracts, proposed changes to sick pay, the Fair Pay Agreements and Trade Union rights are likely to begin soon whilst those on Fire/Rehire practices aren’t expected until next year.

In terms of when changes envisaged in the Bill will come into effect it is clear that many will be later rather than sooner. With layered legislation like this we can expect a series of staged implementation dates. We already know from the ‘Next Steps to Make Work Pay’ paper that the right to claim Unfair Dismissal from Day 1 proposal would not come into effect until Autumn 2026 (at the earliest).

What’s happened to Single Worker Status?

Unfortunately, expected reforms and clarifications on employment status were missing. The Government has realised that abolishing the distinction between ‘employees’ and ‘workers’ remains on the ‘too difficult pile’ for the moment. Much review, analysis and legal thinking together with wider industry and business consultation would be needed before any drafting or re-drafting of this aspect of employment law is feasible.

Have your say

All interested parties involved in the labour supply industry should be looking out for the Government’s various consultations and giving its views and ideas to ensure a positive and favourable outcome for the industry. For our part, PayStream will be continuing to champion the industry’s cause and participating fully.

The introduction of the Bill inevitably adds another level of complexity to employment law and with Employment Tribunals already hard pressed there looks to be little prospect of the changes making the law clearer. 

Concerns with associated costs

There are undoubtedly concerns for smaller businesses who lack the appropriate HR and legal infrastructure to develop and implement the correct processes and procedures to get things right. 

The prospect of an effective labour market enforcement body enforcing compliance with a more complex set of employment laws, whilst a laudable aim, may cause smaller businesses to worry about how to comply with its employer duties.

Although we don’t yet know the intricacies of the operational aspects of the new legislation it is likely to lead to increased administration, and the need for additional legal and HR resources for many large employers and agencies. 

PayStream are here to help

These increased burdens can be alleviated by PayStream, who has experienced teams ready to support businesses large and small through these significant changes. Our help extends as far as the client’s business needs – from advice on contractor queries, employment grievances, employment reference requests and of course, payroll operation.

PayStream can offer a fully compliant Professional Employment Organisation (PEO) option to agencies enabling them to future-proof any issues arising out of the new Employment Rights Act.

Our existing agency partners are aware of the valuable support which PayStream already provides. If the changes proposed in this new Bill cause you any concerns or you would like to discuss any further services you may need, such as the PEO, please don’t hesitate to contact your Key Account Director for more information.