Labour's rights bill - dawn of a new era

The Employment Rights Bill (ERB) was introduced within 100 days, as promised, by the new Labour government on 10 October. For those of us who practise in this area, it represents the dawn of a new era in employment and trade union law.

This article sets out some key provisions contained within the ERB and offers early observations. There is a huge amount of detail that is subject to future secondary legislation and statutory codes of practice. The ERB proposes substantial modifications to current laws, but more is promised as wider reforms are included within the Next Steps to Make Work Pay document that was also published by the government on 10 October.

The ERB gets its second reading on 21 October, when amendments may be proposed. Once the ERB gets royal assent the Strikes (Minimum Service Levels) Act 2023 will be immediately repealed, and certain provisions of the Trade Union Act 2016 will be repealed within two months of that date.

Part 1 of the ERB has attracted the most attention due to the complexity of the proposed individual protections against insecure hours of work, and unfair dismissal rights from day one.

On zero-hours contracts, there remains a debate on whether the proposals cover all vulnerable workers and how rights to guaranteed hours and payments for cancelled shifts will operate in practice. While this remains to be examined through secondary legislation, some experts think that solutions may be inspired by existing laws that permit flexibility contained in the Working Time Regulations. On unfair dismissal, a different scheme is envisaged during an ‘initial period of employment’ (a probationary period) where a ‘light-touch’ procedure will apply, but any statutory probationary period will be subject to consultation before it is planned to be introduced in autumn 2026 (at the earliest).

The protections against ‘fire and rehire’ are also found in Part 1 and include any dismissal in response to a refusal to agree to a variation to any term of a contract. Some trade unions have criticised the proposals for not being an outright ban, whereas some employers have criticised the high thresholds on potential defences against imposing unilateral variations of contract. Again, while some can see parallels with frameworks in existing laws (Trade Union and Labour Relations (Consolidation) Act 1992), future consultations on the enabling secondary legislation will seek views on ways to offer protection for vulnerable workers and promote ‘worker voice’ while facilitating the flexibility that businesses crave.

An obligation for employers to take all reasonable steps to prevent sexual harassment and improve protection against harassment by third parties is also included within Part 1. These sit alongside changes to day-one statutory sick pay, flexible working and entitlements to paternity, parental leave and also to bereavement leave (which would have wider application).

Part 2 of the ERB will widen the gateway to collective redundancy consultation (as discussed in Next Steps to Make Work Pay) Also, be aware that the government plans to increase compensation (protective awards), presumably to target businesses which previously priced in the costs of circumventing current laws. The Two-Tier Code, a proposed form of protection for parity on the terms and conditions of workers outsourced from the public sector, and proposals requiring large private sector employers to develop and publish an Equality Action Plan, also feature here.

Sectoral collective bargaining is something that trade unions use to create agreed terms and conditions for workers, which is particularly important for those in precarious and vulnerable employment. Part 3 of the ERB relates to detailed proposals on fair pay agreements through the reinstatement of the School Support Staff Negotiating Body and the establishment of the Adult Social Care Negotiating Body. These schemes are seen to affect largely low-paid female employees.

Part 4 includes substantial changes to trade union rights and industrial action laws. Much of this will reverse changes introduced by the Trade Union Act 2016, but there are new rights too: rights of trade unions to access workplaces, prohibition against detriment for participation in industrial action, and facilities to be provided for trade union representatives. It also confirms the repeal of the unused Strikes (Minimum Service Levels) Act 2023.

The lack of adequate enforcement for employment rights has been a well-documented concern for years, as in the Taylor review of modern working practices in 2017. Part 5 of the ERB bestows upon the business secretary powers to appoint enforcement officers on labour market legislation, such as national minimum wage and paid annual leave rights.

Further reforms in Next Steps to Make Work Pay (not covered in the ERB) include extending the current pay gap reporting and equal pay rights to cover ethnicity and disability, as well as a proposed ‘right to switch off’ through a statutory code of practice. There are also commitments to introduce a single employment status definition for workers and increase time limits for bringing claims from three to six months.

In conclusion, the depth and scale of reform is breathtaking and will affect every UK worker, trade union and employer. It creates a challenge that has faced sharp criticism from some politicians and practitioners, but no one can say they did not know what was coming. All should be given an opportunity to contribute their views and arguments in the multitude of consultations in the pipeline. The impact of the ERB will be measured by how it affects real lives and real workplaces.

Shantha David and Bruce Robin are solicitors with UNISON Legal Services