What Labour’s Employment Rights Bill could mean for UK workers

One expert say Labour’s bill ‘promises to be the greatest overhaul of workplace rights for 30 years’

Labour’s employment rights bill is expected to be tabled in the near future (PA Wire)

Labour’s workers’ rights bill is expected to be tabled in the coming days as the party looks to deliver on its pledge to pass the landmark reforms within 100 days of power.

The raft of major changes is part of the Employment Rights Bill, thought to be spearheaded by deputy prime minister Angela Rayner. Labour said the legislation would “strengthen the collective voice of workers” as part of its ‘Plan to Make Work Pay: Delivering A New Deal for Working People’, which was launched before the election.

The party’s manifesto also claimed the bill would “stop the chaos and turn the page to create a partnership between business and trade unions”. With the measures representing some of the most significant changes to workplace rights in a generation, some experts have said that business leaders may feel disproportionately affected.

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Labour has attempted to play down this tension, with business secretary Jonathan Reynolds saying there had been “scaremongering” over the bill.

“I don’t think it’s onerous what we’re putting forward,” he added. “But I do think it will make a difference to people’s lives.”

Business and trade secretary Jonathan Reynolds (PA Wire)

Caspar Glyn KC, chair of the Employment Lawyers Association, said the bill “promises to be the greatest overhaul of workplace rights for 30 years”.

He added: “Employees and unions will see their rights strengthened and this inevitably comes with a concomitant cost and reduced flexibility for business. Labour is trying to navigate a tricky tightrope to strengthen workers’ rights without creating undue costs and restrictions on businesses.”

Here is an overview of how the bill could change the workplace for employees across the UK:

New day one rights

The Employment Rights Bill is expected to make parental leave, sick pay and protection from unfair dismissal all available from day one of the job for all workers.

Labour said the measures will not prevent employers from operating probationary periods for new hires to test their suitability for the role, but it is understood the maximum time for these will be reduced to six months.

“How impactful this will be depends on how probationary periods are treated. Companies will want to have sufficient time to ensure they can dismiss employees who are unsuitable for their role,” says Mr Glyn.

“Meanwhile, if the probationary period is too long and permissive, then unions and employees will question the value of strengthened dismissal rights.”

‘Exploitative’ zero-hour contracts banned

New measures would ban what Labour terms “exploitative” zero-hour contracts, to make sure workers get a contract that reflects the number of hours they work. The rules will also require workers to be compensated for any changes in shifts that are made without reasonable notice.

This is “significant” said Mr Glyn, as the contracts “can often be abusive with all the flexibility lying with the employee and not the employer”.

He added: “Providing surety for a guaranteed number of hours over a reference period could give workers more financial security. That said, many workers enjoy the flexibility of the existing system – such as part-time Uber drivers – and it’s not yet clear how they might be affected.”

Fire and rehire outlawed

Controversial ‘fire and rehire’ practices are when an employer fires one or several employees to offer them a new contract under different terms – generally, less favourable ones.

The issue gained attention in 2021 when Tesco proposed firing some of its distribution staff and rehiring them on lower pay. Last month, the supermarket chain lost a Supreme Court battle with the Usdaw union over the row. Tesco accepted the judgement which it said affected “a very small number of colleagues”.

Labour’s plan states: “Labour will end the scourges of ‘fire and rehire’ and ‘fire and replace’ that leave working people at the mercy of bullying threats. We will reform the law to provide effective remedies against abuse and replace the inadequate statutory code brought in by the government with a strengthened code of practice.”

Right to switch off?

Announced after Labour’s manifesto and not included in the King’s Speech, the “right to switch off” plan was announced since the general election. The measure would give workers the right to ignore their bosses’ calls and emails outside of regular hours, and to turn down extra work.

Speaking in August, the prime minister’s deputy spokesperson said: “This is about ensuring people have some time to rest.

“Good employers understand that for workers to stay motivated and productive they do need to be able to switch off, and a culture of presenteeism can be damaging to productivity.”

However, recent reports indicate Labour may have watered down or delayed this in the face of pressure from business owners. It could take the form of guidance to employers instead of a legal requirement.

Will Stronge, director of research at The Autonomy Institute said the potential U-turn was “embarrassing,” adding: “A genuine right to switch off outside of work hours is desperately needed to end the blurring of boundaries between work and free time.”

A cost of living wage – and pay rise for young workers

Outside of the bill, Labour has said it will make sure the minimum wage is a “genuine living wage” by asking the independent pay decision-makers to consider the cost of living in its calculations for the first time.

The party has also committed to removing “discriminatory age bands” so that all adults are entitled to the same minimum wage. The minimum pay for 18- to 20-year-olds is currently nearly £3 lower than those aged over 21. For those under 18, it’s around £5 – but Labour has not clarified if this will also be changed.