Although the Employment Rights Bill will not be in effect until next, it is important that HR considers the implications now.
The Labour government is now settling into its new term and one of the most significant changes it is bringing is to the workplace. The Employment Rights Bill of the government has received a lot of attention, and there are some concerns about its impact on employers. It is a time for change and adaption, but may also be a challenging time for employers. They will need to deal with potentially expensive issues along with increases in taxes and minimum wage.
The Bill is not expected to come into force until next summer, but it’s clear that the new measures will have a profound impact on how people work. HR has plenty of time to prepare for the changes and to understand them, but they should not wait to start planning.
Unfair dismissal begins on the first day
The government has introduced a number of significant measures, including the introduction of day-one unfair dismissal rights. This is a departure from the existing requirement of two years’ service. Garvey Hanschard, partner of Bloomsbury Square Employment Law, notes that “While this new law aims to increase job security, business groups are concerned about rising costs, and reduced flexibility when hiring decisions.”
Hanchard claims that the decision has been met with reservations by many organizations representing employers and those who are involved in recruitment. According to the Federation of Small Businesses, day-one rights for employment could cost UK companies an extra PS1.2 billion in legal fees, redundancy payments, and administrative costs. Hanchard explains that employers fear these new protections will encourage more employment tribunal cases, which would add financial and operational burdens. Hanchard is concerned that, while job security may improve, the flexibility of hiring people could also be affected.
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Hire carefully or increase security
This move could make employers less willing to hire employees, especially those who have less traditional backgrounds. This reluctance could have a negative impact on job creation in industries that depend on temporary or flexible workers.
This level of protection allows workers to be more confident and committed in their new role. The new arrangement could actually benefit employers as employees are more engaged with a role and workplace they perceive to be reliable.
It is also important to remember that, while the Bill provides employers with day-one employment rights, it will also include a Statutory Probation Period. This period will be expected to last between six and 12 months. However, businesses will be able fairly evaluate their new hires prior full Employment Rights applying. Could this Bill, despite everything, actually provide a better balance between the risks of hiring someone and their potential to add real value to an organisation?
Hanchard advises that businesses should not resist reform but instead focus on ensuring the framework is fair and practical. If implemented properly, these changes can foster a more productive and stable job market that benefits both employers and employees.
Harassment prevention
Lydia Wawiye Senior Associate Employment Law Solicitor at Parfitt Cresswell highlights a further aspect of the Employment Bill, which stipulates that employers are required to take “all reasonable measures” to prevent harassment. She notes that this includes showing zero tolerance towards such behaviour from third parties, including clients and customers.
Direct discrimination and indirect discrimination will be banned, as will harassment (defined by the law as “unwanted conduct”) and victimisation.
Wawiye has a positive opinion on the new law: “The new legislation should make life easier for everyone in the workplace, since it is illegal for employers to ignore discriminatory behavior, no matter who it originates from.
The Employment Rights Bill also contains several other aspects that will have a significant impact on HR, such as family leave entitlements and flexible working rights. It also addresses ‘hire-and-fire’, and zero hour contracts.
Review, prepare, consult
Riaan van Wyk, Senior consultant at Barnett Waddingham, says that even though many of the Bill’s proposed changes will not take effect until 2026, HR should review their policies as soon possible to identify any areas which need updating. They will also need to train HR staff and managers in order to ensure compliance and understanding of any changes.
Van Wyk advises HR to engage early with employee representatives in order to navigate the changes in a collaborative manner and use a clear strategy for communicating about rights and workplace changes.
He says that the introduction of day-one rights could have a major impact on how employers and employees conduct themselves. “Employers will feel more exposed, while employees feel more protected. It will be interesting to watch how this new dynamic plays out.”
