Employment law experts suggest that the government is likely to publish the Employment Rights Bill on 10 October, living up to its promise of delivering legislation (at least in draft) within 100 days of coming into power.
Many of the probable elements of the Bill have been flagged already, having first appeared as pledges in the Labour Party’s election manifesto in its Plan to Make Work Pay or its New Deal for Working People.
Broadly, the Bill is intended to address issues such as insecure work, low pay, day-one rights and the exploitation of workers. But a number of questions remain over the exact details of the legislation, which will have to undergo consultations and parliamentary votes before it comes into force.
We set out five key questions for HR on the Employment Rights Bill:
What does ‘probation’ mean for day-one rights?
When the Employment Rights Bill was announced in the King’s Speech in July, it was confirmed that employees would gain day-one rights to unfair dismissal, “subject to a probation period”.
Employment Rights Bill
Since the introduction of unfair dismissal law in 1971, the qualifying period has fluctuated between six months and the current two years, but there has never been a law regarding the length of a probation period.
In the briefing paper that accompanied the King’s Speech, the government said that “we will continue to ensure employers can operate probationary periods to assess new hires” but it has not specified how long that probationary period should be.
“Multiple” Whitehall sources told the Financial Times last month that deputy prime minister Angela Rayner and business secretary Jonathan Reynolds had settled on a maximum probationary period of six months but exactly how this relates to a day-one right to claim unfair dismissal remains to be seen.
When is a zero-hours contract ‘exploitative’?
Labour’s manifesto pledged to end what it calls “one-sided flexibility”. It aims to bring more security to workers in precarious roles or zero-hours contracts. The Employment Rights Bill is expected include a ban on “exploitative” zero-hours contracts, a right to a contract that reflects the number of hours they work regularly, and a requirement to give adequate notice of shift changes or cancellations.
There is little detail yet, however, as to how the law will define exploitative. This could be problematic for employers in seasonal industries such as hospitality, where demand can mean short-notice changes to shifts or a sudden change in who is needed. IPSE, a membership organisation for the self-employed, argues that zero-hours contracts can provide “vital flexibility” to some workers who want to work around caring or childcare responsibilities.
“Ultimately, whether zero-hours contracts can be classed as exploitation should come down to whether the worker has the power to choose when to work,” it says. Banning them altogether would not remove unscrupulous work practices from rogue employers, it adds.
Will there be a ‘right to disconnect’?
Labour first mooted adopting a ‘right to disconnect’ – where employees have the right not to respond to communications from their employer outside of contracted office hours – in a Green Paper in 2021. Its election manifesto this year clarified that any right to switch off would likely follow models similar to Ireland or Belgium. These stipulate that workers can not be penalised or disadvantaged for refusing to work outside their normal hours.
A number of countries have already introduced such legislation, most recently Australia, where there are potential fines for employers that breach the rule. Although such a right did not appear in the ‘shopping list’ of reforms set out in the King’s Speech, it could surface in the coming draft legislation and subsequent consultations. The government has not clarified whether the Employment Rights Bill would include outright statutory restrictions, or a code of practice, as in Ireland.
How will changes to sick pay work?
One of the key pledges made by the new government is to “strengthen statutory sick pay” by removing the lower earnings limit and abolishing the three-day waiting period before employees can receive it.
Although employees will welcome the removal of the lower earnings limit – which according to the TUC means 1.3 million people miss out on SSP – there has been no indication thus far as to whether legislation would increase the current rate, which is £116.75 per week. This is just 18% of average weekly earnings, the TUC points out.
If, under the Employment Rights Bill, employees no longer need to wait for SSP to start, they may be more likely to take short-term sick leave, some argue, while others suggest this could encourage employers to take a more proactive approach to managing absence.
What will happen to employment status?
Seven years after it was recommended by Matthew Taylor in his review of modern employment practices, the Labour government has promised to reform the complex area of employment status.
Currently, there are three tiers of workers for the purposes of employment law (employees, workers and the self-employed) and two for tax (employed and self-employed). In recent years, high-profile legal cases have determined whether someone is genuinely employed and therefore eligible for employment rights such as holiday pay and the minimum wage.
In its manifesto, Labour said it would “transition to a simpler two-part framework for employment status” and would consult in detail on a simpler framework that “differentiates between workers and the genuinely self-employed”.
It also said it would look at how worker status is communicated and understood across the workforce, so individuals know where they stand in terms of rights and engagements. There is no consultation underway as yet, so it remains to be seen how this would work in practice.
Personnel Today will be examining the content and implications of the Employment Rights Bill as soon as it is laid before Parliament.
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