The Employment Rights Bill looks set to come into law by the end of 2025.
Now is the time for any business that hires staff to take notice, as the Bill will impact the way that your business operates.
There are a number of steps you can take now so that your business can plan ahead and stay compliant.
What are the big changes coming in the Employment Rights Bill?
The Employment Rights Bill is focused on giving workers more rights and better protections in the workplace.
One of the main ways this is being implemented is with the removal of qualifying periods for a lot of protections, replacing them with ‘day-one protection’ instead.
This means that every worker will be entitled to:
- Protection from unfair dismissal
- Right to request flexible working
- Parental leave
- Paternity leave
The Bill also seeks to provide increased stability for workers by banning any new zero-hour contracts. Employers will also have to change contracts to fixed hours upon the request of the employee.
This is coupled with a ban on ‘fire and rehire’ practices and a greater right to equal pay for agency workers, though this will require them to have worked for twelve weeks.
In addition, bereavement leave for grieving parents is being extended to cover pregnancy‑loss before 24 weeks.
What does this mean for businesses?
The main considerations centre around compliance.
You will need to ensure you have updated your employees’ contracts to better reflect their rights within the workforce and ensure your payroll processes are equally aligned to account for this reform.
You also need to ensure you do not accidentally infringe upon any of these rights, otherwise, you could face tribunal action and compensation costs.
From a financial perspective, the change to the way contracts are managed could be a concern for some businesses too.
If your business relies on zero-hour contracts, you need to assess your financial structure to ensure you can manage your business with fixed-hour contracts.
There is increasing concern that enhanced leave rights and guaranteed‑hours contracts could increase wage bills and employer National Insurance Contributions (NICs), as well.
This is set to be felt hardest by SMEs, many of which are already facing pressures from inflation.
As the Bill makes its way through the House of Lords, now is the time for your business to prepare.
While many employees will welcome the added protections, a lack of preparation could leave your business in financial trouble as a result of not planning ahead.
Seeking professional guidance is the best way to minimise any negative impact that the Employment Rights Bill could have on your business.
Protect your business and understand the cost of your new obligations by speaking to our team today.
