The new Labour Government has promised “the biggest upgrade to workers’ rights in a generation” under a new Employment Rights Bill. It aims to enhance employment rights for workers, addressing issues such as zero-hour contracts, fire and rehire practices, and sick pay entitlements. But how will these reforms work in practice and what can employers do to prepare for these changes?

This article looks at how small businesses can adapt so they not only remain compliant, but also foster a more engaged, diverse, and resilient workforce.

What are the key provisions of the Employment Rights Bill 2024?

Ban on exploitative zero-hour contracts

The bill seeks to eliminate contracts that offer little or no guaranteed hours of work, giving workers more security and predictability.  Once the specific details of the new legislation are released, zero-hours contracts will likely need careful review.

To avoid potential compensation claims, businesses should exercise greater caution when dealing with zero-hours staff, ensuring they receive adequate notice of any changes to their work schedules.

End of fire and rehire schemes

This controversial practice, where an employer makes an employee redundant and rehires them on new, and often worse terms, will be outlawed to protect workers’ rights.  

The new Labour Government has indicated that it intends to replace the statutory code with a strengthened code of practice.

Given the potential damage to your company’s reputation and employee morale, ‘fire and rehire’ should be used cautiously. Employers must thoroughly consult with their workforce and consider all other options before resorting to this approach.

Introduction of basic workers’ rights from day one

New employees will be granted essential rights, such as the right not to be unfairly dismissed from their first day of work.   

We are waiting for the draft Employment Rights Bill for more details about Labour’s plans. In the meantime, most employers already have a probationary period in place for new employment contracts, but they could start being more vigilant in whether they can prove the employee’s agreement to this, such as written acceptance of terms from the employee. 

Improved sick pay rights

This would mean all employees being entitled to Statutory Sick Pay (SSP) from their first day of sickness absence and there will be no earnings requirements to be eligible.  

This is a key concern for small business owners, resulting in increased direct costs and administration around sick pay. It may potentially lead to higher levels of short-term sickness absence if employees know they no longer need to wait for sick pay to kick in.

Enhanced flexible working arrangements

The government intends to make flexible working the default option for employees, promoting a better work-life balance.  This will likely result in employers facing more requests for flexible working, but these must be balanced with their operational needs to make this sustainable.  

We recommend reviewing current policies around flexible working to consider how they might reflect the new legislation when it is finalised, in particular with relation to the length of service required.

Maternity discrimination

New employment law regulations came into force on 6 April 2024, improving the rights of employees and giving them more flexibility. The proposals extend rights for pregnant workers as well as those returning from maternity leave. It includes making it unlawful to dismiss a woman within six months of returning from maternity leave “except in specific circumstances”. 

Greater flexibility has been introduced to statutory paternity leave for employees where the expected week of childbirth is after 6 April 2024, or the expected date of placement for adoption is after this date.

Employers should ensure that both maternity and paternity leave policies are updated in light of these changes.

Get expert advice on the new Employment Rights Bill 2024 with 1850

While many of these proposals lack detail right now, it is still important for employers to be aware of the points that may affect their workforce and business. 

As soon as these changes come into effect, employers will need to be ready to update their policies and procedures to reflect the new legal requirements and seek further advice from us to ensure the best possible outcome for your business and your employees.