New Employment Rights Set to Enhance Worker Protections

Over seven million employees are poised to receive enhanced rights, including sick pay, maternity pay, and protection against unfair dismissal from their first day at work due to significant new legislation.

The Labour Party plans to reveal what they describe as a «once-in-a-generation» reform of employment rights on Thursday, aiming to improve job security for workers.

Following discussions with business leaders, government officials have made concessions on key reform elements, notably deciding against a statutory ‘right to switch off’ policy.

The forthcoming Employment Rights Bill will detail the initial phase of Labour’s proposals to improve worker rights, initiating a rigorous discussion regarding the specifics of the reforms while consultations on executing these measures are set to begin.

Among the pivotal reforms is a guaranteed right to sick pay for all employees from their first day of illness. Currently, individuals are only eligible for sick pay after their fourth day of sickness, and those earning less than £123 a week are denied any sick pay benefits.

This reform is expected to extend new sick pay rights to an estimated 7.4 million workers, as well as an additional million earning below the existing threshold.

However, after business lobbying against creating a potential «perverse incentive» for workers to take sick leave, it appears that ministers will implement a reduced rate of sick pay for employees earning below the designated threshold, which may spark discontent among unions.

Small businesses may not receive the anticipated government support to offset the increased costs associated with enhanced sick pay, further raising concerns in the sector.

Under the new rules, women will have the right to apply for maternity pay from their first day of employment instead of waiting six months, including better protections against dismissal upon their return. Additionally, more fathers will gain access to paternity pay rights.

Current probation periods, which can extend up to two years, will be reduced to six months, granting employees protection against unfair dismissal right from the start of their employment. Employers will retain the authority to terminate employment during probation without undergoing a complete performance evaluation, provided they furnish a written explanation for the dismissal.

Ministers have reassessed their plans concerning the ‘right to switch off’ for employees, opting not to adopt an internationally established model that mandates companies to develop a code of conduct regarding out-of-hours communication. Instead, businesses will be encouraged to establish these codes without legal obligation.

There is potential for backlash from both business groups and unions, with employers expressing worries over the added burden of the new rights, while unions argue that the changes do not go far enough. The government is optimistic that detailed discussions on the legislative nuances will bridge the gap between both parties.

Labour aims to deliver a draft law within the first 100 days of their administration, implying that specific details will be finalized through subsequent legislative measures.

Further aspects of Labour’s proposals, such as the introduction of a unified ‘worker’ classification to combat fake self-employment and a reform of employment tribunals to aid employees in contesting unfair treatment, have been postponed until later in the parliament.

According to Anna Leach, chief economist at the Institute of Directors, while the reforms have the potential to improve employment standards by eradicating ‘unfair’ practices, there is also a concern that they might inadvertently increase hiring costs and limit job opportunities.

Paul Nowak, general secretary of the TUC, remarked that if the Employment Rights Bill is implemented in its entirety, it could significantly enhance working conditions for millions, emphasizing that good treatment of employees boosts productivity and living standards.

These proposed laws represent Labour’s most substantial reforms since coming to power and may spur renewed claims from Conservative parties regarding ‘French-style’ labor regulations. This initiative follows substantial, above-inflation wage increases for public sector workers, including those in teaching and healthcare, amounting to £9.4 billion.

A government source stated, «Our initiative to ensure that work compensates has consistently focused on driving economic growth by enhancing security for workers, boosting productivity, and creating a level playing field for enterprises. Providing sick pay when necessary is crucial for achieving this goal.»

Key Reforms Breakdown

Sick Pay Rights

Current Situation: Workers gain sick pay rights only after three days of illness, receiving £116.75 per week for up to 28 weeks, with no access for those earning under £123 per week.

Proposed Change: All employees will gain sick pay from their first day of illness, albeit those earning below the existing threshold may receive a lower rate.

Zero-Hours Contracts

Current Situation: Employers can implement contracts that do not guarantee working hours, leading to employees working only when requested.

Proposed Change: Such contracts may be banned if classified as “exploitative.” Reforms will be discussed to maintain worker flexibility when desired.

Maternity Leave and Pay

Current Situation: Women must be employed for 26 weeks and earn above £123 per week to qualify for maternity benefits.

Proposed Change: Women will be able to notify their intention for maternity leave on their first day at work, safeguarding them from dismissal.

Probation Duration

Current Situation: Employers can dismiss employees without facing tribunal claims for unfair dismissal for a period of up to two years.

Proposed Change: The maximum probation period will be reduced to six months, requiring formal reasons for dismissal without a full performance process.

Flexible Working Conditions

Current Situation: Employees can request flexible arrangements from their first day, but approval is at the employer’s discretion.

Proposed Change: Employers will generally be expected to approve such requests unless doing so would not be “reasonably practicable.”

Out-of-Hours Communication

Current Situation: There are no clear regulations governing when employers can contact employees outside of working hours.

Proposed Change: While no legal restrictions akin to those in France will be implemented, ministers will advocate for businesses to develop voluntary codes of conduct regarding out-of-hours contact.