The government’s Employment Rights Bill has announced a delay in the implementation of day-one protection for workers against unfair dismissal until 2027.
This decision comes after concerns from businesses, and the new timeline will also include guaranteed flexible working and a ban on exploitative zero-hours contracts.
The government has stated that this roadmap will provide businesses with the clarity and certainty they need to plan, invest, and grow. However, some business groups have expressed worries that these changes may disrupt their operations and discourage them from hiring new employees.
The specific details and timing of these measures are still subject to further consultation and have not been confirmed yet.
The Employment Rights Bill is currently being reviewed by the House of Lords and is not expected to receive Royal Assent until the fall.
The government plans to have certain measures in place by next year, starting in April. These include removing the current limits on statutory sick pay and implementing new whistleblowing protections, day-one paternity leave, and unpaid parental leave rights.
From October next year, additional measures will be put into effect, such as ending fire and rehire practices and changing the tipping law to ensure fairer tip distribution.
Business Secretary Jonathan Reynolds has stated that the government has worked with businesses of all sizes throughout the process to ensure the bill is beneficial for them.
TUC general secretary Paul Nowak has welcomed the changes, stating that they are long overdue and should be implemented as soon as possible.
However, business groups have expressed concerns about the impact on their members. Tina McKenzie from the Federation of Small Businesses (FSB) stated that many small companies do not have the resources to navigate these changes, and they are worried about the complexity and risk it may add to their operations.
The bill will apply to England, Scotland, and Wales and will grant workers the right to claim unfair dismissal from day one, instead of the current two-year qualifying period. However, there will be a nine-month probation period during which employers can dismiss employees more easily and without following the full process.
Alex Veitch from the British Chambers of Commerce has warned of potential unintended consequences that could limit employment opportunities and economic growth. He also stated that the estimated £5bn cost for businesses to implement these measures comes on top of recent increases in National Insurance contributions and the minimum wage.
The government has yet to provide details on how statutory probation periods will work, and there are concerns about changes to statutory sick pay and zero-hours contracts.
Shadow business and trade secretary Andrew Griffith has criticized Labour’s decision to delay the bill, calling it another U-turn and an admission of getting it wrong.
The bill also includes measures to simplify the trade union recognition process, repeal rules that limited strike action, and establish a Fair Work Agency to enforce workers’ rights and combat exploitation.