In a significant move to overhaul workplace rights, the new government, under Prime Minister Keir Starmer, has outlined plans for a comprehensive Employment Rights Bill. Announced in the recent King’s Speech, this legislation aims to end exploitative work practices and enhance employment protections.
Here are the key takeaways and proposed changes that small and medium-sized enterprises (SMEs) need to know and what you need to review.
Key Provisions of the Proposed Employment Rights Bill
Day One Rights
Employees will gain protection against unfair dismissal from their first day on the job, following a probation period and be entitled to request flexible working arrangements from day one. This change underscores the need for SMEs to manage probation periods diligently and document performance issues meticulously as well as prepare to accommodate flexible working requests and consider how to implement such arrangements without disrupting business operations.
Zero-hours contracts that exploit workers will be outlawed. SMEs using such contracts will need to reassess their staffing models and consider alternative arrangements that offer more security to workers.
The Bill also proposes enhancements to statutory sick pay and an increase in the minimum wage so SMEs will need to budget for these increases and update payroll systems accordingly.
Employees on or returning from maternity leave will receive stronger protections against redundancy and a ban on ‘fire and rehire’ practices will prohibit employers from dismissing staff and then rehiring them on less favourable terms. A review and, if necessary, revision to employment contracts and termination procedures to comply with this ban may be needed.
Additional Legislation
Equality (Race and Disability) Bill This legislation will require employers with 250 or more staff to publish ethnicity and disability pay gaps. While this may not directly affect smaller SMEs, those approaching the 250-employee threshold should prepare for future compliance.
Skills England A new body will work with employers to enhance skills development and reform the apprenticeship levy. SMEs should look out for opportunities to engage with Skills England to benefit from these initiatives.
AI Legislation: Regulations will be introduced for the development of powerful artificial intelligence models.
Preparing for Change
Following the new Bill, Neil Carberry, CEO of the Recruitment and Employment Confederation, emphasised the importance of the government working closely with the private sector to ensure these reforms are practical and beneficial. He cautions against rushing these changes without proper consultation, which could harm both workers and businesses.
For SMEs, the key takeaway is to stay informed and proactive. Reviewing and updating employment practices now will help ensure compliance when these new laws come into effect. Seeking external HR advice or consulting with legal experts may also be beneficial to navigate these changes smoothly.
The proposed Employment Rights Bill is poised to bring about significant changes aimed at creating a fairer and more secure working environment. By preparing early, as a SME, you can adapt successfully and continue to thrive in this evolving landscape.
