2024 marked a pivotal period of legal reform, bringing notable changes in areas such as holidays, family-related leave, new regulations on tips, and measures to address sexual harassment. Additionally, it introduced several new statutory Codes of Practice which have laid the foundations for future changes around employment relations in the UK.
On 10 October 2024, the UK government introduced the Employment Rights Bill, which introduced significant reforms aimed at enhancing worker protections.
The government positioned this legislation as a ‘pro-business, pro-worker’ initiative with some of the key changes including:
Day-one employment rights: employees having the right to unfair dismissal protection from their first day of employment, eliminating the current two-year qualifying period. However, the bill allows for a potential probationary period during which different dismissal rules may apply.
Zero-hours contracts: while zero-hours contracts were not entirely banned, the bill introduced requirements for employers to offer a guaranteed hours contract based on regular working patterns. Workers will also be entitled to reasonable notice of shift changes.
Ban on “fire and rehire”: the bill sought to make it automatically unfair to dismiss employees if they refused to accept contract changes, addressing the controversial practice of firing employees only to rehire them under worse terms.
Flexible working: flexible working would become the default, and employers will be required to provide detailed explanations for any refusal of a request for flexible work.
Strengthened family leave: the bill expanded family leave rights by removing qualifying periods for paternity and parental leave, and introducing stronger protections for pregnant workers and those returning from family-related leave.
Statutory sick pay: statutory sick pay would be made available from the first day of illness, and the lower earnings limit for eligibility will be removed.
Trade unions: the bill enhanced trade union rights, such as workplace access, and repeals restrictive elements from previous legislation, including parts of the Trade Union Act 2016 and the Strikes (Minimum Service Levels) Act 2023.
Enforcement: a new labour enforcement body, the Fair Work Agency, was established to consolidate existing agencies to ensure compliance with employment laws, particularly around pay and working conditions.
These reforms will be rolled out gradually, with some changes taking effect by 2026. The bill is part of the broader ‘Plan to Make Work Pay’ initiative by the Labour government, which emphasises fairer employment practices and greater worker protections.
Response to the Employment Rights Bill
Response to the bill was generally favourable from all stakeholders such as the CBI, who commented that the government should be recognised for its openness to collaborating with both businesses and unions. The cooperative approach to identifying the best path forward, ensures improved living standards while avoiding the negative outcomes that businesses have cautioned against.
Working Families, a national charity for working parents and carers, also noted that they were encouraged by the positive outlook brought by the transformative changes proposed in the upcoming bill, which could greatly benefit millions. The charity did however warn that it was crucial the government continues the constructive dialogue to ensure the final details of this important bill are thoroughly refined.
Trade unions were more sceptical however, stating that the proposal had more holes than Swiss cheese and the government had tied itself up in knots trying to avoid what was promised.
Many employers were also worried the changes could increase costs and reduce hiring, while the expansion of trade union rights, such as greater access to workplaces, is causing concern among industries with traditionally low union membership, like tech.
The changes in the employment law bill still did not address issues highlighted by the P & O sacking scandal in 2022, as the ferry service provider essentially ‘settled’ with their workers which is difficult to prevent. However, the new law does seem to benefit good employers to compete on quality and innovation, rather than a race to the bottom, which has been the theme for a number of years.
Small businesses already struggling with tight profit margins, are most likely to feel the brunt of these changes as it could push up costs as well as enforce a freeze on recruitment. The proposals for expanded trade union rights, including greater access to workplaces, are particularly worrying for firms in the technology industry and other areas with historically low union membership rates are.
The government’s decision to consult on many of the reforms showed a pragmatic approach, but there is concern that increased regulation might hinder productivity rather than lead to a more buoyant economy. Additionally, what is described as pragmatism may also come across as uncertainty in 2025 and beyond, which will see the state as well as employers address the growing influence of artificial intelligence (AI) which is anticipated to play a transformative role in employment law. Key areas of focus will include workforce automation, discrimination and privacy.
As AI increasingly handles routine tasks, the challenge of addressing job displacement will intensify, pushing the government law makers and businesses to strike a balance between technological progress and workforce protection. AI’s expanding role in hiring, performance assessments, promotions, and workplace monitoring will also spark greater demands for oversight to ensure fairness, safeguard privacy, and promote transparency, while actively preventing discriminatory practices.
