The recent publication of the Employment Rights Bill marks a significant shift in employer obligations and workers’ rights in the UK.
- The Bill introduces statutory sick pay as a day one right, increasing compliance costs for businesses.
- Unfair dismissal claims can be initiated from day one of employment, altering dismissal procedures.
- Regulatory enforcement will intensify with the establishment of a new Fair Work Agency.
- Family-friendly workplace policies will be enhanced, affecting paternity and maternity leave processes.
The Employment Rights Bill, published recently, represents a substantial update to workers’ rights and employer responsibilities. Charlie Barnes, head of legal services at RSM UK, highlights that though the Bill delivers on promises to overhaul worker protections, it introduces complexities that employers must navigate. The Bill must pass through Parliament and though largely supported, it may undergo consultations, with no fixed implementation date established yet.
The shift in statutory sick pay to a day one entitlement eliminates previous lower threshold limits. This inevitably raises costs for employers, particularly those with significant sickness absence rates, necessitating payroll and HR process adjustments. Furthermore, the Fair Work Agency’s regulatory enforcement will add to compliance costs, necessitating vigilance among employers.
A notable change is the right to lodge unfair dismissal claims from the first day of employment, as opposed to the previous two-year service requirement. However, a statutory procedure during probationary periods will exempt this right, requiring a thorough review of current dismissal and probation policies and procedures. This change may lead employers to reconsider recruitment strategies due to the increased procedural demands.
While zero-hours contracts remain permissible, the Bill mandates guaranteed hours and compensation for late cancellations under certain conditions. This complex requirement may lead businesses to reassess their reliance on flexible labour models and consider alternatives like short-term contracts.
The establishment of the Fair Work Agency, consolidating existing regulatory bodies, is set to strengthen enforcement of employment standards, including the National Minimum Wage and holiday pay. Larger employers, those with over 250 employees, may face new gender pay gap reporting requirements, heralding potential penalties for non-compliance.
Family-friendly policies will see enhancements, with fathers gaining paternity leave rights from day one and mothers’ protections during pregnancy and post-maternity leave increasing. Employers must revise their benefit offerings to accommodate these legislative changes, reflecting workforce diversity.
Employers will face an augmented duty to prevent workplace sexual harassment, expanding responsibilities to include the actions of third parties. Effective October 2024, this requires comprehensive risk reassessments and mitigative action planning to meet new obligations.
The Employment Rights Bill signifies a new era of employment regulation, requiring employers to carefully assess and adapt to these comprehensive changes.
