What the employment rights bill means for employers
The Employment Rights Bill 2024, unveiled on 10 October 2024, is set to be the most significant upgrade to workers’ rights in a generation. This 150-page Bill proposes 28 major reforms aimed at modernising the workplace, improving conditions and benefiting both businesses and workers.
Key proposals:
- National Minimum Wage increase:
- from April 2025, the National Minimum Wage will rise to £12.21 per hour, including for zero-hour contract workers.
- Statutory Sick Pay (SSP) extension:
- SSP will be available from the first day of sickness, removing the current three-day waiting period and minimum earnings threshold.
- Protection against unfair dismissal:
- workers will gain the right to claim unfair dismissal from day one, replacing the current two-year qualifying period with a nine-month probation period.
- Guaranteed hours for zero-hour contracts:
- employers must offer guaranteed hours based on a 12-week reference period, though workers can opt to remain on zero-hour contracts.
- Reasonable notice for shift changes:
- employers must provide reasonable notice for any shift alterations, ensuring fair treatment of workers.
- Compensation for cancelled shifts:
- workers on zero-hour contracts will be entitled to compensation if their shifts are cancelled, moved or curtailed at short notice.
- Restriction on ‘fire and rehire’ practices:
- employers can only fire and rehire workers to avoid serious financial threats, such as insolvency.
Impact on businesses:
- administrative burden: increased paperwork and compliance requirements
- legal risks: higher potential for litigation, especially for small businesses
- cost implications: additional costs associated with higher wages, SSP and compensation for cancelled shifts.
Preparation tips:
- update contracts: reflect new laws in work contracts, staff handbooks and HR procedures
- use technology: implement HR and payroll software to manage new requirements
- plan ahead: conduct due diligence during recruitment and provide robust onboarding support.
Final thoughts:
While the Bill poses challenges, it also offers opportunities for businesses to improve worker satisfaction and loyalty. By adapting to these changes, businesses can ensure continued growth and success.
