Workers to get flexible working right 'by default' and 'day one' protection from unfair dismissal under Labour plans
10 October 2024, 09:11
The Government will today announce details of new rights for workers, including plans to ban exploitative zero-hours contracts and "unscrupulous" fire and rehire practices which it said will benefit millions of workers.
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Ministers described the Employment Rights Bill as the biggest boost to pay and productivity in the workplace in a generation.
Unions warmly welcomed the measures as a "seismic shift" from the low pay, low productivity economy they accused the previous Conservative government of presiding over.
But business owners fear it may force them to 'freeze employment' as the changes could tie up small firms in too much red tape.
Martin McTague, national chairman of the Federation of Small Businesses (FSB), warned last night: "With all the good intentions, this [Bill] will inject fear into that employment relationship. It makes most small businesses very nervous."
Tina McKenzie, policy chair at the FSB, described the legislation as a "rushed job, clumsy, chaotic and poorly planned".
She added: "Beyond warm words, it lacks any real pro-growth element and will increase economic inactivity, seriously jeopardising the Government's own 80 per cent employment target."
There are 28 separate changes in the Bill, with most of them not expected to be implemented before the autumn of 2026.
Some measures, such as the right to "switch off" at the end of a working day, are not in the Bill but will be included in a so-called Next Steps document for further consideration and consultation.
Under the Bill, the existing two-year qualifying period for protections from unfair dismissal will be removed and workers will have the right from the first day in a job.
Ministers say this will benefit nine million workers who have been with their employer for less than two years.
There will be consultations on a new statutory period, with ministers promising employers a "lighter touch" process covering dismissals.
The bill also says flexible working will be made the default 'where practical."
The Bill also spells out day one rights for paternity, parental and bereavement leave for millions of workers, while statutory sick pay will be paid from the first day of a worker being sick rather than having to wait until the fourth day.
Around 30,000 fathers or partners will be eligible for paternity leave, while an extra 1.5 million parents will have the right to unpaid leave from day one.
Flexible working will be made the default position "where practical", while large employers will be required to create action plans on addressing any gender pay gaps.
On the controversial issue of zero-hours contracts, employers will have to offer a guaranteed hours contract based on a 12-week reference period.
Workers on zero-hours contracts will also be entitled to a reasonable number of shifts and financial compensation if a shift is cancelled or cut short.
Deputy Prime Minister Angela Rayner said: "This Labour Government's plan to make work pay is central to achieving our growth mission, boosting productivity.
"After years of stagnation under the Tories, we're replacing a race to the bottom with a race to the top, so employers compete on innovation and quality.
"It's by making work more secure and modernising workplaces that we will drive up productivity, improve living standards, generate jobs and investment, and pave the way for sustained economic growth that benefits working people.
"We're calling a time on the Tories' scorched earth approach to industrial relations. A new partnership of co-operation between trade unions, employers and government will put us in line with high-growth economies that benefit from more co-operation and less disruption."
Business Secretary Jonathan Reynolds said: "Our plan will give the world of work a much-needed upgrade, boosting pay and productivity.
"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."
TUC general secretary Paul Nowak said: "After 14 years of stagnating living standards, working people desperately need secure jobs they can build a decent life on.
"Whether it's tackling the scourge of zero-hours contracts and fire and rehire, improving access to sick pay and parental leave, or clamping down on exploitation - this Bill highlights Labour's commitment to upgrade rights and protections for millions.
"Driving up employment standards is good for workers, good for business and good for growth.
"While there is still detail to be worked through, this Bill signals a seismic shift away from the Tories' low pay, low rights, low productivity economy."
Matt Wrack, Fire Brigades Union general secretary, said: "The banning of zero-hour contracts, the outlawing of fire and rehire, and other despicable working practices promoted by the Tories, are long overdue."
Gary Smith, GMB general secretary, said: "This is a significant and groundbreaking first step to giving workers the rights they've been denied for so long.
"Fourteen years of Conservative rule has seen squeezed pay packets and attacks on working people and their unions; this Bill is hugely welcome."
Mr Smith welcomed other measures including fair pay agreements for carers, reinstating the School Support Staff Negotiating Body and repealing "anti-union" legislation.
Mick Lynch, general secretary of the Rail, Maritime and Transport union, said: "This is the most significant set of reforms in workers' rights that we've seen in decades and is a far cry from the Tory government's attempts to suppress the aspirations of working people."
Ministers stressed they had consulted extensively with unions and business groups on the Bill and said more discussions will be held.
Peter Cheese, chief executive of HR body the CIPD, said: "Done right, these changes can improve working lives and opportunities and help drive economic and social benefits."
Dave Ward, general secretary of the Communication Workers Union, said: "After decades of attacks on workers from the Tories, there must be no delay in delivering these changes not any capitulation to the demands of big business to water down the legislation."
Jemima Olchawski, Fawcett Society chief executive said the Bill was a win for women, adding: "We have a pernicious gender pay gap which means, on average, women take home £574 less than men every month; measures like gender pay gap and menopause action plans will help to close the gap and ensure women are valued throughout their working lives."
Unison general secretary Christina McAnea said: "Shifting the balance to give workers greater rights is long overdue.
"Expectations are high for this bill, which should bring once-in-a-generation changes to the workplace.
"For too long employees have had to suffer poverty wages, intolerable working conditions and discrimination."
Tina McKenzie of the Federation of Small Businesses, said: "This legislation is a rushed job, clumsy, chaotic and poorly planned - dropping 28 new measures onto small business employers all at once leaves them scrambling to make sense of it all.
"Beyond warm words, it lacks any real pro-growth element and will increase economic inactivity, seriously jeopardising the Government's own 80% employment target."
Conservative shadow business secretary Kevin Hollinrake said: "Despite a chorus of opposition and the fastest decline in confidence from business owners large and small on record, Labour are rushing this legislation through Parliament to appease their trade union paymasters, ignoring the inevitable negative economic impact on jobs and wages.
"This is a thinly veiled reward for the trade unions after they donated £28 million to Keir Starmer's
Labour Party.
"We will look closely at the detail of what the Labour Party have set out. But businesses and the economy needs certainty not the threat of being sent back to the 1970s, unleashing waves of low threshold, zero warning strikes, driving down growth and slowing productivity."
