The government has unveiled its Employment Rights Bill pledging to upgrade workers’ rights and tackle poor working conditions.
Introduced within 100 days of the government coming to office, the bill removes the two-year qualifying period for protections from unfair dismissal, in line with Labour’s manifesto. Among businesses welcoming the move is the Co-op Group.
The bill includes 28 individual employment reforms, such as “ending exploitative zero hours contracts” and fire-and-rehire practices, establishing day-one rights for paternity, parental and bereavement leave, removing the lower earnings limit for all workers and cutting out the waiting period for statutory sick pay.
Under the bill, zero-hours workers, along with those on low-hours contracts, will have the right to a guaranteed hours contract if they work regular hours over a defined period. The government estimates that more than one million low-paid workers on zero hours will have the right to job security on a new contract as a result of this. It also argues that another nine million UK people will gain new rights against unfair dismissal.
The bill also repeals the anti-union legislation put in place by the previous government, including the Minimum Service Levels (Strikes) Act legislation that failed to prevent a single day of industrial action while in force, and makes flexible working the default for all, unless the employer can prove it is unreasonable.
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Other new protections include establishing a right to bereavement leave and protection from dismissal while pregnant, on maternity leave and within six months of returning to work.
The government says 30,000 parents will gain new rights to paternity leave, with 1.5 million becoming entitled to unpaid parental leave.
The government has also revealed plans for furture reforms, including a right to switch off, preventing employees from being contacted out of hours, except in exceptional circumstances; expanding the Equality (Race and Disparity) Bill to make it mandatory for large employers to report their ethnicity and disability pay gap; and reviews into the parental leave and carers leave systems.
“Our plan will give the world of work a much needed upgrade, boosting pay and productivity,” said business secretary Jonathan Reynolds, a Labour/Co-op MP. “The best employers know that employees are more productive when they are happy at work. That is why it’s vital to give employers the flexibility they need to grow whilst ending unscrupulous and unfair practices.
“This upgrade to our laws will ensure they are fit for modern life, raise living standards and provide opportunity and security for businesses, workers and communities across the country.”
Several businesses and business groups expressed support for the bill, including the Co-op Group and the British Retail Consortium.
“We support the government’s ambitions to strengthen rights for workers and value the co-operative approach to involve employers in the reforms,” said Shirine Khoury-Haq, CEO of the Co-op. “As the UK’s largest consumer co-operative, Co-op has long supported colleagues to have good working lives, with policies like our leading bereavement leave, day one right to request flexible working arrangements, and menopause support already in place. The positive impact of these policies is clear to see.
“Being able to support colleagues when they need it, and in particular women, parents and carers, helps retain valuable talent and makes good business sense. We look forward to continuing to work with the government to make work pay and to deliver economic growth.”
Octopus Energy, which supplies energy to Your Co-op Energy customers in partnership with Midcounties Co-op, has also welcomed the reforms.
“In formulating these proposals, it’s clear that the government has listened to both workers and employers to create protections against bad practices while enabling good businesses to invest in growth and training,” said Octopus CEO Greg Jackson. “For example, the probation period will allow progressive employers to give a chance to people without typical experience or educational backgrounds, opening up new opportunities for them in great careers.”
But Tina McKenzie, policy chair at the Federation of Small Businesses, criticised the bill for being “rushed job, clumsy, chaotic and poorly planned”.
“Plans to give day one unfair dismissal rights to new employees will add to the risks associated with hiring people,” she said. “That increased risk will inevitably deter small employers from taking on new people, for fear of facing an employment tribunal simply because a new recruit turns out to be unsuited to the role. That’s bad for jobs, and a barrier to growth and investment.
“A vague reference to a statutory probation period, with no detail of what that would look like, won’t reassure small employers.”
McKenzie added the legislation risked “deterring small employers from taking a chance on someone who has had a significant period out of the workplace, shutting those doors and deepening social exclusion”.
“The added employment costs the proposed legislation will inevitably bring will also jeopardise job creation, which will in turn be a brake on growth and investment,” she said.
McKenzie added that the government’s forthcoming consultation must factor in the needs of seasonal small businesses and already-struggling sectors such as hospitality and tourism.
“Sufficient time should be taken to avoid this becoming a hastily cobbled-together act of Parliament. We look forward to more engagement and the start of a full consultation on each individual measure to ensure the voice of small employers is heard,” she said.
