Businesses need not panic about the proposed changes in the Employment Rights Bill.
This announcement today is by no means a done deal. It is a draft Bill. It could be years until we see the Employment Rights Bill come into force with reports claiming, in some cases, employees will need to wait near 1,000 days to enjoy the new rights.
The proposals will go through the scrutiny of Parliament where it will typically ping-pong between the House of Lords and Commons, before we likely see a very watered-down version of Thursday’s proposals, as we saw with the Workers Protection Act. So, who knows what the legislation will look like at the end of this process.
It will be the companies however that are seen to be flexible, not fixated on the pounds and pence, and embracing change who will be the ones that build a positive reputation that retains and attracts good staff.
Increased costs to businesses
Businesses should also be reassured that increasing statutory sick pay and maternity and paternity pay will impose no additional cost to their company. As in the current system, all statutory pay is paid by Government.
Where employers will incur costs due to the Employment Rights Bill, is in the HR processes that will need to be reviewed and implemented to update them in line with the new regulations or any encouraged guidelines.
With flexible working by default, new statutory pay, and day one rights, there will be lots of contractual changes that businesses will need to consider, which could cost some companies thousands. Invest in updating your Company HR Handbook too and ensure that all staff know where to find the information on employment policies and rights.
An accurate and clear Handbook could save you a lot of time, hassle and money in the long run from a tribunal claim plus protect your reputation. Use processes to help make life less complicated.
We’ve known that this was coming for a while now so this shouldn’t be a surprise to many HR teams and employers, with many having already reviewed and considered their employment policies in line with the forthcoming proposal.
Protection for new parents
Introducing a better deal for new parents such as women being able to apply for maternity pay in their first day on the job, fathers being given better paternity rights, and better protection against dismissal on return to work, is a positive move for UK workplaces.
However, this legislation could go further so it will be interesting to know the outcome of further consultation, beyond this Bill, into the parental leave and carers leave systems.
It is not surprising ‘right to switch off’ is now subject to further consultation
It was difficult to see how Labour was going to legislate ‘right to switch off’ so it’s not surprising that this is now subject to further consultation.
Flexible working or a ‘right to switch off’ won’t work for every company, especially those with overseas contracts working across different time zones where they need someone to be available at different times of the day and week.
Companies will need to take a case-by-case approach when creating ‘right to switch off’ guidelines and explore how flexible working could work. It isn’t a one-size-fits-all for most. That means having a conversation with each employee, which is advised to avoid complications down the line.
The Bill could lessen claims or open the floodgates
It was the right move for employees for the Government to reduce the current two-year rule before workers have full employment rights and to agree further consultation on other areas such as a mandatory probationary period.
Reducing this timeframe will certainly give employees quicker access to worker rights.
Nine million people, who are currently unable to claim, will now gain rights under the new Bill to claim sick pay, maternity pay, bereavement leave, and protection against unfair dismissal from their first day in the job.
Whilst not all parts of this proposed legislation will work for all businesses, having a really good piece of legislation in place that gives clearer policies and better protection could lessen the number of employment claims made.
However, countering this argument is the new Workers Protection Act, which comes into law on 26th October and could open the floodgates to a surge in Tribunal claims, as we’ve seen with the recent Next Equal Pay claims, further extending delays in an already overburdened system. There was a 13% uplift in total Tribunal claim receipts in April to June 2024.
Tribunal proceedings are lengthy, lasting two to three years in some cases, they are expensive, and stressful, both for employees and employers. It’s best for all parties involved to explore alternative solutions, such as mediation and negotiated settlements, where possible.
Under the new Workers Protection Act courts now have the power to uplift compensation by 25% if you’re in breach of this Act, which could amount to a hefty fine. It’s vital to resolve issues outside of the courtroom to avoid unnecessary strain on individuals and the legal system.
