Will legislation to improve workers’ rights live up to the billing?

Labour’s flagship Employment Rights Bill has already come under fire from some for being too watered down or bad for business. Sean O’Grady looks at what impact the legislation will have

A new Labour government is hardly worthy of the name (at least to its core supporters) if it doesn’t address the legal rights of working people. Hence the Employment Rights Bill, unveiled as promised in Labour’s first 100 days in office, albeit only just beating the deadline.

After some weeks in which, it’s fair to say, things haven’t been running that smoothly for Keir Starmer and his colleagues, the return of parliament from the summer recess and a flow of exciting fresh legislation offers the hope of moving the national conversation on from donors, free tickets and Sue Gray’s salary. And what could be more invigorating for new Labour MPs than helping the people who put them where they are now.

Is the bill “the biggest upgrade to rights at work for a generation”, as claimed?

It could well be, but only if it lives up to certain expectations – at the moment too much detail is out for consultation to be sure. Such discussions with interested parties could take two years. What we do know is that the bill will provide for:

• “Day one rights” to claim unfair dismissal for all. At the moment this only applies to cases involving a protected characteristic (race, disability, gender, age), with others only gaining such rights after two years of employment

• Paternity and bereavement leave rights will also apply from day one

• A universal right to sick pay will apply from the start of employment

• A new specific statutory period of probation, perhaps of nine months for new recruits. This is much longer than the usual period currently. “Light touch” regulation is promised here, to give employers the confidence that they can indeed “let go” a staff member if they’re found unsuitable. There will be consultations on this

• “Zero hours” contracts will be abolished, except for when workers actually want them. Workers will have a right to a guaranteed-hours contract if they work regular hours over a defined period

• “Fire and rehire practices” will be mostly outlawed – again, there’ll be talks on what exceptional circumstances might apply

• Age bands that set lower minimum wages for younger workers will be scrapped

• There’ll be a right to flexible working, “where practical”

• It will be mandatory for large employers to report ethnicity and disability pay gaps

• A Fair Wage Agency day will target sweatshops

There’ll be a consultation on the definition of a “worker”, clearing up the confusion about who is an “employee”, “freelance”, a “worker” and self-employed. These affect employment rights and tax status, and can sometimes be at odds with one another. The Taylor review of modern working practices looked into this almost a decade ago but with no subsequent action. It should make the work of employment tribunals easier.

Is that all?

It’s not a bad slug of changes but Angela Rayner, as deputy prime minister, and Jonathan Reynolds, as business secretary, will also get rid of the Tory laws on “minimum service guarantees” in vital public services (never used in practice), and slightly loosen the threshold for strike action.

Will this satisfy the activists?

Not entirely. The earlier iterations of Rayner’s New Deal for Working People were much more ambitious, and economically significant, such as statutory sectoral collective bargaining across all employers and whole sectors of the economy on a national basis. This has completely disappeared, as has the “right to switch off”, and not be bothered by bosses during time off (though there’ll be “guidance” on this).

Will the bill be popular?

It should be because most people are workers, not bosses, and like to know where they stand. Paul Nowak, The TUC’s general secretary, claims that: “Labour’s workers’ rights plans are hugely popular across the political spectrum – including with Tory and Reform voters. After 14 years of stagnating living standards, people desperately want secure jobs they can build a decent life on. The government’s plan to ‘make work pay’ – delivered in full – would improve incomes and the quality of work across Britain.”

How popular this prospective workers’ paradise turns out to be does, though, rather depend on the prevailing climate in industrial relations. Constant strikes and trade unions perceived to be “too powerful” can quickly change the public mood, as happened in the 1970s, which were followed by decades of gradual erosion of many workers’ rights from the 1980s on.

What do the Tories say?

As in so many areas, it’s all a bit muted pending the outcome of the leadership contest. Kemi Badenoch attracted some adverse coverage when she implied that levels of maternity leave and pay are already too high, especially in smaller businesses, and the Conservatives have traditionally favoured a “flexible” deregulated labour market to boost profits and job creation, with employers confident they can easily hire or make people redundant as needed. Whether Robert Jenrick or Badenoch leads the Tories into the next election, the Tories will no doubt pledge to reverse many if not all of Labour’s employment reforms in the name of business efficiency and a smaller state.