Last week saw the release of the government’s eagerly anticipated employment rights bill. The 158-page document provides an outline of the 28 workers’ rights reforms that employers will have to navigate once the bill is enacted into law.
This includes a day-one right to protection from unfair dismissal, new restrictions on zero-hours contracts and additional protections for working mothers.
A companion publication titled Next Steps to Make Work Pay, released concurrently, details the next phase of Labour’s plans to reform the relationship between employers and employees. It proposes introducing a new right to switch off, legislating mandatory ethnicity and disability pay gap reporting and a move towards a single worker status, subject to consultation.
Now that HR professionals have had a chance to comb through the bill, what do HR leaders make of the changes – and how will it impact their ever-increasing workloads?
A mixed bag
Although the package of reforms in the employment rights bill was not as comprehensive as many thought it would be, former Adidas HR chief Amanda Rajkumar remains “encouraged” and hopes the changes will raise employment standards and create “fairer, more equitable, working practices”.
HR will be down in the weeds until more details become clear
But not all HR teams are feeling positive about the changes. HR tech platform Brightmine polled its clients following the bill’s release, revealing concerns these reforms will create more work for HR, legal departments and line managers, particularly at small businesses.
Zuraida Curtis, Brightmine’s senior employment law and compliance editor, says: “While some see it as a move in the right direction, others think the changes are too heavy and will bring more costs to businesses that are already under pressure.”
She says there will be “quite a bit” for HR to do in order to prepare for these changes. This will include reviewing policies, procedures and contracts to ensure they will still be fit for purpose and keeping on top of any further changes. “I suspect HR will be down in the weeds until consultation starts and more details become clear,” Curtis adds.
Increased complexity
One of the most complicated reforms to implement remains the introduction of a day-one right to protection from unfair dismissal, replacing the current two-year qualifying period. Employers had warned in advance of the bill’s publication that making this a day-one right could have a detrimental impact on recruitment, as it could make employers take a lower-risk approach to hiring and lead to the increased use of temporary contracts.
This change means that any decision to dismiss new hires must stand up to scrutiny in an employment tribunal, according to Gareth Burrows, founder of HR solutions provider Breathe HR. “Decisions to hire new staff will therefore come with more risk and, potentially, costs,” he says.
The government suggested a new statutory probationary period of nine months as a compromise, which would give employers additional time to assess new recruits.
Requests to work differently will create time-consuming work for already stretched HR teams
Despite this compromise, HR teams will still need to ensure hiring processes are “thorough” with the “right level of selection and assessment”, Rajkumar says.
Another change in legislation that has caused some concern for business leaders is the decision to make flexible working the day-one default for all employees. Despite this change, businesses will retain the right to refuse flexible working arrangements if they’re not practical.
“There are eight different reasons businesses can use,” explains Jo Mackie, partner and director of employment at Burlingtons Legal LLP. “So there is very little change there. Business has always been able to say: ‘we can’t approve it because it doesn’t work for our hours or we can’t afford for you to do this.’”
But Burrows claims, with the onus now on employers to prove any flexible working request is unreasonable, the changes could create more admin for HR. “Requests to work differently will create important but time-consuming work for already stretched HR teams,” he says. “Accommodating flexible working requests will also require careful thought and planning for service industry and blue collar teams in particular.”
A lack of clarity
HR teams will be on the front lines of these workers’ rights reforms. However, many HR leaders are still seeking clarity on how the new legislation will be implemented, according to Lisa Townsend, chief people officer of MoneySuperMarket parent company Mony Group. “It’s fairly high level at the moment and a lot could change,” she says.
With the release of the bill, the government has set out a “skeleton of what they want”, Mackie adds. “There is a lot of detail on trade unions, there’s a good bit of detail on zero-hours contracts but there’s not a lot of detail on anything else.”
The government has adjusted some elements of the bill since they were first proposed. Banning fire and rehire has been significantly weakened, according to Mackie. She says: “A lot has been watered down and will continue to be watered down through consultation.”
With many elements of the bill subject to consultation, there will be a lengthy transition period for employers to navigate. “To be successful, HR teams must be able to pivot quickly in an environment of changing legislation,” says Alastair Logan, advisory director at HR software provider Dayforce. “HR teams will have to be ready for the increased complexity on day one.”
While it’s advisable for HR teams to prepare for these changes, the majority of the reforms are unlikely to come into effect until 2026. Rajkumar says: “If firms start working on these implications now, it should be all okay.”
Last week saw the release of the government’s eagerly anticipated employment rights bill. The 158-page document provides an outline of the 28 workers’ rights reforms that employers will have to navigate once the bill is enacted into law.
This includes a day-one right to protection from unfair dismissal, new restrictions on zero-hours contracts and additional protections for working mothers.
A companion publication titled Next Steps to Make Work Pay, released concurrently, details the next phase of Labour’s plans to reform the relationship between employers and employees. It proposes introducing a new right to switch off, legislating mandatory ethnicity and disability pay gap reporting and a move towards a single worker status, subject to consultation.
