The Government has finally revealed its highly anticipated Employment Rights Bill (ERB), dubbed by Labour as “the biggest upgrade to workers’ rights in a generation.”
For weeks, rumors have circulated about the ERB announcement, leaving businesses across all sectors wondering how they’ll be impacted and how to prepare.
In today’s announcement the new government has confirmed that they will be looking to introduce 28 individual employment reforms. So, let’s dive right in and look at some of key announcements.
Key Takeaways from the Employment Rights Bill Announcement
Day-One Employment Rights: A proposal to remove the existing 2-year qualifying period to ensure all workers have rights immediately, however they have promised to consult on a statutory probation period which could be up to 9 months.
Zero-Hour Contracts: The bill will look to end “exploitative” zero hour contracts and introduce the right to guaranteed hours in certain circumstances.
Flexible Working: Flexible working will also become a default option unless the employer can prove it is unreasonable. Additionally, there will be proposals for establishing a new right for bereavement leave, and protection from dismissal for expectant or new mothers.
New Fair Work Agency: A new ‘Fair Work Agency’ will be established to protect workers and ensure employment rights are upheld. We are still waiting for detail however the announcement confirms that the current enforcement bodies—National Minimum Wage, GLAA, and Employment Agency Standard, will be brought together to create a super regulator.
Beyond the Bill:
In addition to the above, the government has also outlined other areas that they wish to address in the future which includes a proposal to move towards two-part (worker & self-employed) framework for employment status.
What does the Employment Rights Bill mean for recruitment agencies and the supply chain?
From what we can see, the government appears to have acknowledged the importance of the agile workforce, as the announcement confirms that individuals will be given the opportunity to choose whether they remain on a zero-hours contract.
What does the Employment Rights Bill mean for umbrella regulation?
There isn’t any mention of umbrella regulation within the ERB however the introduction of the fair work agency, could potentially result in umbrella companies coming under its control. The new government has made no mention of “Tackling non-compliance in the umbrella company market” consultation that closed in August 2023 however we may hear more in the upcoming budget.
Chris Bloor, Director of Compliance at Caroola Group, stated:
“Today’s announcements do not come as a surprise; however, they are hopefully able to give the recruitment industry and UK Plc as a whole, some certainty as to the direction of travel, and allow businesses to start to plan accordingly”.
“It is my understanding that the bill is set to be implemented in 2026, which allows sufficient time for consultation with businesses, and resulting in a collaborative and informed decision on each of the proposals.”
“The recruitment and contractor payroll industry have traditionally worked well together to understand and implement compliant processes and policies therefore Parasol look forward to engaging with our agency partners and clients to ensure a successful outcome”.
Countdown to the Autumn budget
With the Autumn Budget just around the corner, we’re set to see even more changes very soon including updates on taxes, pensions and apprenticeships. Make sure to check back on our website and follow us on socials for the all-important updates.
