Rayner’s reforms promise to ‘upgrade’ employment laws

Labour has promised an “urgent upgrade” to workplaces in the 149-page Employment Rights Bill, hailed as the biggest overhaul to workers’ rights in decades.
Angela Rayner, the deputy prime minister, and Jonathan Reynolds, the business secretary, said the reforms would lead to “jobs that provide security, treat workers fairly and pay a decent wage”, adding: “No one working full-time should be struggling to pay bills and afford essentials”.
Unions welcomed the scale of the ambition, while businesses have been offered concessions to ease concerns that the reforms will add to costs and reduce hiring. A year or more of consultation lies ahead, after which Labour promises more reforms.
Here is what the bill does — and doesn’t — include:
The biggest concern of businesses is that all workers will have protection against unfair dismissal from their first day on the job. Ministers are promising probation periods of nine months during which there will be a “light touch” process for dismissing staff. They suggest a formal meeting to which employees can bring a trade union representative.
Caspar Glyn KC, an employment law expert, said the reforms would lead to “a sea change in rights not to be unfairly dismissed” and Alex Hall-Chen of the Institute of Directors said businesses needed to be able to “take a risk” on hiring someone “without a significant risk of an employment tribunal”.
• Why Labour’s workers’ rights bill splits small and big businesses
Ministers are promising almost two years of consultation to try to address such concerns, which are acute among small businesses. But it remains to be seen whether they can do so without diluting extra legal protections so much that they become meaningless.
Although staff currently have the right to ask for flexible working arrangements such as compressed hours or working from home, bosses are under no obligation to say yes. The bill will reverse this, requiring bosses to allow flexible working unless they reasonably think it would be impractical. There are eight specific grounds on which bosses can refuse, ranging from “burden of additional costs” to “detrimental impact on performance” and “inability to reorganise work among existing staff”.
More than seven million staff will gain statutory sick pay on the first day of illness, rather than the fourth day, as is now the case. Workers earning below the current threshold of £123 a week will also be entitled to sick pay for the first time. However, to avoid a perverse incentive to go off sick, the low-paid will be entitled to a reduced rate of sick pay below the current £116.75. This will be set at a percentage of weekly earnings, to be decided during consultation.
Employers must offer all staff a contract with guaranteed hours, although workers can refuse if they prefer flexibility. The exact number of hours workers must be offered will be decided by looking at their normal working hours during a 12-week reference period. Ministers promise to consult on how this will continue to allow exceptional overtime and temporary contracts.
Staff will also have to be given “reasonable notice” of shift changes and be entitled to compensation if shifts are cancelled at short notice.
“Fire and rehire” practices will be banned, preventing bosses from laying off staff en masse and re-employing them on worse terms. However, exemptions will be allowed where there is “genuinely no alternative” for companies to remain viable.
Fathers will be given immediate rights to paternity leave from day one, and both parents will also be able to take parental leave immediately. Pregnant women and new mothers will get greater protection against being sacked. People will also be able to take bereavement leave when a close family member has died. A wider review of parental leave is promised later in the parliament.
The bill sets up a social care “negotiating body” which will begin setting national pay levels and terms and conditions for all staff. This is designed to drive up pay and harmonise a fragmented social care workforce, and is seen by unions and ministers as a key step towards creating a national care service. The deal will also form a template for “fair pay agreements” in other sectors.
All restrictions imposed by the Conservatives on trade unions over the past 14 years will be repealed, while a series of new powers will be granted. All workers must be told by their employers of their right to join a union, and reps will be given the right to enter workplaces to recruit and organise new members.
Unions will find it easier to get formal recognition and to launch industrial action as rules on ballots are relaxed, and online voting will be allowed.
Union equality officers will also gain the right to time off for activities “promoting equality in the workplace”, mirroring rights currently available to reps. Bosses will also be required to give all union reps facilities such as office space.
Workers will have to opt out of political funding to Labour and other campaign work, reversing Conservative rules requiring them to opt in.
A new Fair Work Agency will bring together enforcement powers over issues ranging from sick pay and the minimum wage to modern slavery. The goal is a “recognisable single brand” to make it easier for staff to complain about bad bosses. The body can issue fines for ignoring rights, which ministers feel are not strongly enough enforced.
The government has backed down from mandatory codes of conduct for employers, setting out the right not to answer email or take phone calls at evenings and weekends. It is instead planning to publish a broader code of practice, which employment tribunals will consider when they weigh up cases. Glyn said: “That is very far from a right or the need for a policy that the government promised. [It] is a way of paying lip service to rights without making them effective.”
Labour has pledged to simplify the employment status in a bid to strengthen workers’ rights. At present there are three tiers of workers under employment law — employees, the self-employed or a broader category of workers — each with their own employment rights. Labour wants a single status of worker with the same rights, under which people are either employed or self-employed. The plans will go out to consultation later in the parliament.