Employment Law Reforms

The new Labour government recently unveiled what it calls ‘the biggest upgrade to employment rights for a generation’, bringing forward 28 separate reforms. The Employment Rights Bill will introduce day-one protection from unfair dismissal, removing the current two-year threshold, and day one rights for paternity, parental and bereavement leave. However, most of the changes will not be implemented for at least two years.

"Exploitative" zero hours contracts and fire and rehire practices will be banned. Statutory sick pay will be strengthened, removing the lower earnings limit for all and abolishing the three-day waiting period.

Flexible working will be the "default for all, unless the employer can prove it is unreasonable".

Other mooted reforms have been put out to consultation however, which has found favour with employers. These include a new statutory probation period for companies’ new hires, which "will allow for a proper assessment of an employee’s suitability to a role as well as reassuring employees that they have rights from day one". Following intense lobbying from business, the government now aims to make that nine months, having previously suggested that it would recommend six.

A new enforcement body, the Fair Work Agency, will be created with the power to levy fines on employers that breach the new rights.

There are also fears an expansion of rights will pile further pressure on an overloaded justice system. Latest statistics show that Employment tribunal claims are increasing while disposals are slowing. The number of unresolved cases rose 18% in the quarter to 30 June compared with the same period last year, with the total reaching nearly 44,000.

The Federation of Small Businesses, meanwhile, has warned that day-one rights "will inevitably deter small employers from taking on new people, for fear of facing an employment tribunal".

Most of the reforms will not take effect any earlier than 2026, the government confirmed.

Oliver Kew

Published on 06/11/2024