Business lobby groups hoping that the Employment Rights Bill will be shelved or materially changed are likely to be in for a disappointment, according to legal experts.
According to a report in the Financial Times, prime minister Keir Starmer told the Parliamentary Labour Party earlier this week that the Bill “will continue with the same substance and timetable as before”, and indicated that Labour will overturn any Conservative-backed amendments.
The Bill has just returned to the Commons after its third reading in the House of Lords, and any proposed amendments will be considered on 15 September, after which the Bill is likely to return to the Lords to be debated again.
Concerns over the future of the Bill were raised this weekend after deputy prime minister Angela Rayner resigned, and a cabinet reshuffle saw employment rights minister Justin Madders sacked from his position.
Employment Rights Bill
Rayner, Madders and former business secretary Jonathan Reynolds have been among the main architects of the Bill.
Employment law expert Darren Newman, writing in his blog A Range of Reasonable Responses, argued that Rayner’s departure alone was not cause for concern, but dismissing the minister directly involved with getting it through parliament could suggest the government was open to a fresh approach.
Unions had already expressed concern after the reshuffle that key elements of the Bill, such as stricter limitations on “fire and rehire” practices and zero-hours contracts, could be watered down or lost completely.
Pro-business bodies, such as the Federation of Small Businesses, had seen the reshuffle as a potential opportunity to “fix” issues with the Bill.
But Newman added: “I’m afraid those hoping for an explicit government U-turn are going to be disappointed. The Bill is still going to pass. We are well past the point when the government can introduce new changes.”
Many of the tabled amendments to date have been proposed by Labour MPs, he pointed out, so are likely to be accepted by the Commons where the government has a large majority.
Ben Smith, senior associate at employment law firm Littler, agreed that he “did not expect the ERB itself is going to change much”.
“The biggest amendment made by the Lords would remove the day one right to unfair dismissal and instead simply shorten the qualifying period for unfair dismissal to six months, down from two years, while retaining the new concept of the ‘initial period of employment’ after that six-month period,” he explained.
“It is very unlikely that the government will accept this amendment (which was a non-government amendment in the Lords), and the Lords are unlikely to break the long-standing convention that it will not block a manifesto commitment, so it is likely that day-one unfair dismissal will remain in the ERB.”
Changes after the Bill has passed
Smith suggests that one possibility is that some of the ERB’s reforms, which will need to be introduced through secondary legislation, could be delayed or altered after the Bill has passed.
“Lots of the key detail in the ERB has been left for secondary legislation, and so those regulations, which will be made following further consultation, is where there is scope for change,” he added.
“For example, much of the detail regarding the operation of the new day one right to unfair dismissal is going to be subject to consultation and secondary legislation, so naturally there is scope for changes to be made.”
Another proposal is a lighter-touch dismissal process during a statutory probation period, which will be defined through secondary legislation.
Smith continued: “There are also areas in the Plan to Make Work Pay which are still subject to policy development and consideration, that are early enough in the process to be reconsidered if the government chose to do so, such as the right to switch off (which is already subject to speculation).”
I’m afraid those hoping for an explicit government U-turn are going to be disappointed.” – Ben Smith, Littler
Further proposals around introducing ethnicity and disability pay gap reporting are also currently under consultation and are expected to be introduced via an Equality (Race and Disability) Bill later this year.
“So, while the ERB may not end up changing before it is passed, there may be opportunities for the government to take a different approach to employment law in its future legislative agenda if it chose to do so,” said Smith.
Speaking at the TUC’s annual congress, the new minister for local government, Alison McGovern, said the Employment Rights Bill remained a “cornerstone” of the government’s manifesto, although details would be worked through until “we get to the right place”.
In July, the government published a roadmap for implementation of the Employment Right Bill, with some of the key measures, such as ‘day-one’ protection from unfair dismissal not pencilled in until 2027.
Further consultations on aspects of the Bill, such as a ban on zero-hours contracts are yet to take place.
Newman added: “What is in the Bill itself cannot be altered – but when and how the Bill will be implemented was always going to be the key issue.
“Don’t expect any Ministerial announcements denouncing the Bill or explicitly abandoning any of its provisions. Instead expect to see a gradual slipping in the timetable and more openness to business concerns when it comes to the detail.”
Sign up to our weekly round-up of HR news and guidance
Receive the Personnel Today Direct e-newsletter every Wednesday
Employee relations opportunities on Personnel Today
Browse more Employee Relations jobs
