The Employment Rights Bill: A game-changer for UK businesses and workers

What It Means: Employees now have the right to claim unfair dismissal from their very first day of employment, rather than after two years as it currently stands. The change aims to provide immediate protection for workers, making it harder for businesses to dismiss employees without proper cause early in their tenure.

Impact on Employment Businesses: Employment businesses and employers must review their probationary processes. Employers will need to carry out more thorough recruitment, referencing, and onboarding checks, as the ability to dismiss employees easily in the first two years will be curtailed. This could also lead to an increase in employment tribunal claims, which are already heavily backlogged.

What It Means: The bill is set to clamp down on so-called ''exploitative'' zero-hours contracts, ensuring workers receive a contract reflecting their actual hours worked. Employees also gain the right to receive notice for any shift changes, providing them with more stability and predictability in their working schedules.

Impact on Employment Businesses: Sectors the rely heavily on zero-hour contracts, such as hospitality, retail, and healthcare, will be particularly affected. Employment businesses will need to ensure contracts are more structured and reflective of consistent work patterns, making staffing more rigid and likely increasing operational costs as flexibility diminishes.

What It Means: The controversial practice of firing employees and rehiring them on less favourable terms - often used during business restructuring - will be banned under the new Bill. This practice has been criticised for undermining workers' rights during periods of financial difficulty or restructuring.

Impact on Employment Businesses: Businesses that have relied on fire-and-rehire practices for managing costs or navigating difficult periods will need to find alternative methods for restructuring. This may involve more emphasis on negotiation and consultation with employees, potentially prolonging the restructuring process and increasing costs.

What It Means: The bill will remove the lower earnings threshold, which currently limits who qualifies for statutory sick pay (SSP). Additionally, the three-day waiting period before sick pay kicks in will be abolished, allowing workers to receive SSP from their first day of illness.

Impact on Employment Businesses: The expansion of SSP eligibility will likely increase costs for employers, as more workers will qualify for paid sick leave. Employment businesses may need to adjust their absence management strategies to account for this, as well as ensure that misuse of the system is minimised.

What It Means: Flexible working will become the default option for all employees unless employers can demonstrate a strong business reason not to offer it. This reform aims to improve work-life balance, especially for those with caregiving responsibilities.

Impact on Employment Businesses: This change will significantly affect businesses with traditionally rigid working schedules. Agencies and businesses will need to invest in remote working infrastructure and create new policies to manage flexible schedules. The challenge for employment businesses will be balancing employee requests with operational needs, as well as handling increased administration.

What It Means: The bill establishes a new Fair Work Agency, which will combine existing enforcement bodies and provide guidance to businesses on compliance with new regulations. This agency will ensure that businesses adhere to statutory employment rights, including proper payment of holiday pay and minimum wage.

Impact on Employment Businesses: The creation of this agency signals stronger enforcement and greater scrutiny of employers' practices. Employment businesses will need to ensure they are fully compliant with these rules or face penalties. This might involve seeking additional legal advice or increasing internal compliance mechanisms.

What It Means: A consultation will be held regarding the introduction of a "right to switch off" policy, which would limit employers' ability to contact workers outside of their normal working hours, except in exceptional circumstances.

Impact on Employment Businesses: For sectors relying on around-the-clock availability, such as recruitment or customer service, this change could present operational challenges. Businesses may need to hire additional staff or develop new processes to manage out-of-hours work requests without violating the law.

What It Means: Initially targeting sectors with lower wages, such as adult social care, the bill introduces sector-wide pay standards to ensure fair remuneration. This could eventually expand to other sectors.

Impact on Employment Businesses: This could lead to rising wage costs in low-paid sectors, impacting business operating on tight margins. Employers may need to reassess their salary structures and budgets.