The Employment Rights Bill, currently under consideration in the UK Parliament, represents a significant overhaul of employment legislation. The Bill has undergone numerous amendments following extensive consultations with stakeholders, including businesses, trade unions, and civil society. These amendments aim to enhance worker protections, modernize industrial relations, and address long-standing issues within the UK labour market.
Guaranteed hours for agency workers
One of the most notable amendments to the Employment Rights Bill is the extension of guaranteed hours provisions to agency workers. This change addresses the instability associated with zero-hours contracts, ensuring that agency workers are offered contracts reflecting their regular working patterns over a reference period, expected to be 12 weeks. The responsibility for offering these guaranteed hours primarily rests with the end user, the business benefiting from the worker's services. However, the legislation allows for flexibility, enabling agencies or intermediaries to assume this obligation in certain circumstances, which will be detailed in secondary legislation.
Additional protections for agency workers include the requirement for reasonable notice of shift allocations, cancellations, or changes. Agencies are also obligated to compensate workers for short-notice shift cancellations, although they may negotiate terms with the end user to recover costs if the end user was responsible for the change. This amendment aims to provide greater security and predictability for agency workers while maintaining necessary flexibility for employers.
Strengthened remedies for collective redundancy breaches
The Bill introduces significant changes to the collective redundancy framework, doubling the maximum period of the protective award for failure to engage in proper collective consultation from 90 to 180 days' pay per affected employee. This amendment underscores the government's commitment to strengthening remedies against the abuse of rules on collective redundancy and fire and rehire practices. The intention is to enhance the deterrent against employers deliberately ignoring their collective consultation obligations and to ensure it is not financially beneficial to do so.
Despite these changes, the government has decided against introducing interim relief, which would have provided continued pay to employees pursuing claims for protective awards or unfair dismissal in fire and rehire situations. This decision highlights the government's focus on strengthening existing remedies rather than introducing new ones.
Trade union and industrial relations reforms
The Employment Rights Bill includes several amendments aimed at modernizing industrial relations and enhancing trade union rights. These amendments include stronger protections against unfair practices during statutory recognition procedures, a longer mandate for industrial action (increasing from six to 12 months before a fresh ballot is required), and simplified balloting procedures for industrial action. Further consultation is planned on e-balloting, reflecting the government's commitment to aligning trade union operations with modern work practices.
Additionally, the Bill introduces digital access rights for trade unions, allowing them to communicate with employees electronically for collective bargaining purposes, in addition to existing physical access rights. This amendment is expected to facilitate more effective communication between trade unions and employees, enhancing the overall efficiency of collective bargaining processes.
Changes to statutory sick pay eligibility
A notable amendment to the Employment Rights Bill concerns Statutory Sick Pay (SSP). The Bill removes the lower earnings limit, making all employees eligible for SSP. However, rather than receiving the full statutory rates, employees will be entitled to either 80% of their average weekly earnings or the standard SSP rates, whichever is lower. This amendment aims to broaden coverage while maintaining a cost-control mechanism for employers.
The removal of the waiting period for SSP, making it a day-one right, is another significant change. This amendment is expected to provide immediate financial support to employees during sickness absence, although it may lead to an increase in short-term absences. Employers are advised to update their absence-monitoring policies to reflect this change.
Regulation of umbrella companies
The regulation of umbrella companies has long been an area of concern, with previous calls for oversight largely unaddressed. The Employment Rights Bill now includes provisions enabling the regulation of umbrella companies for employment rights purposes. The government has committed to further consultation on ensuring that workers employed through umbrella companies receive comparable rights and protections to those engaged directly by employment businesses.
The Bill also introduces measures to address non-compliance by umbrella companies, allowing enforcement action to be taken against those that do not comply. This amendment reflects a broader effort to address long-standing issues within the UK labour market and ensure fair treatment for all workers.
Implications for employers
The amendments to the Employment Rights Bill present several implications for employers. The extension of guaranteed hours provisions to agency workers and the strengthened remedies for collective redundancy breaches require employers to review and potentially revise their current practices to ensure compliance with the new regulations. Employers must also be prepared to provide reasonable notice of shifts and compensate workers for short-notice cancellations, which may necessitate changes to existing workforce management strategies.
The changes to SSP eligibility and the regulation of umbrella companies further emphasise the need for employers to stay informed about the evolving legal landscape and adapt their policies and procedures accordingly. Employers should also be aware of the potential impact of the Bill's trade union and industrial relations reforms, which may require adjustments to existing collective bargaining and communication practices.
