Amendments to new employment rights legislation tabled following consultation

The Government has tabled a number of amendments to its Employment Rights Bill following the conclusion of consultations with businesses and trade unions in five areas.

The Employment Rights Bill aims to tackle low pay, poor working conditions and poor job security in order to strengthen the economy, and bring the UK’s employment protections in step with other advanced economies. An impact assessment into the bill conducted last year found measures proposed would have a “a positive but small direct impact on economic growth” and will “help to raise living standards across the country and create opportunities for all.”

The amendments, set out in Parliament on 4th March, consider different views and needs of workers, businesses and the whole economy and looks to deliver measures that support the mutual interests required to drive a growing, modern economy.

Amendments follow five consultations covering zero hours contracts, collective redundancy, industrial relations, statutory sick pay, and agency workers working through umbrella companies.

Deputy Prime Minister Angela Rayner said:

“For too long millions of workers have been forced to face insecure, low paid and irregular work, while our economy is blighted by low growth and low productivity.   

“We are turning the tide – with the biggest upgrade to workers’ rights in a generation, boosting living standards and bringing with it an upgrade to our growth prospects and the reforms our economy so desperately needs.   

“We have been working closely with businesses and workers to progress this landmark bill and deliver our Plan for Change – unleashing growth and making work pay for everyone.“

Business Secretary Jonathan Reynolds said:

“Past Governments’ low growth and low productivity economy simply did not deliver what the UK needs, which is why we are choosing stability, investment and reform, not chaos, austerity and decline. This is why our mission to grow the economy as part of our Plan for Change is based on putting more money in working people’s pockets by making wages fairer and work more secure.  

“Many businesses already have worker friendly practices in place and can attest to the positive impact they have on retention, productivity and job satisfaction. We want to go further and untap the UK’s full potential by attracting the best talent and giving business the confidence to hire to help the economy grow.“

On zero hours contracts, amendments include protections for agency workers to also be able to access a contract which reflects the hours they regularly work, as was already planned for those who were directly employed. For agency workers acting through an umbrella company, the Bill will also extend comparable rights and protections to them as when working through an employment business directly.

Statutory Sick Pay (SSP) will be strengthened to boost its availability, and reduce the risk of spreading illness throughout workplaces from those going to work when ill. Employees have a right to Statutory Sick Pay from the first day of sickness absence, and it will be a legal right for all workers for the first time, paid at the lower of either 80% of average weekly earnings or the current rate of SSP.

The Government will increase the maximum period of the protective award from 90 days to 180 days and issue further guidance for employers on consultation processes for collective redundancies. Employment Tribunals will also be able to grant larger awards to employees when employers have been non-compliant, so as to ensure it is not financially beneficial to do so.

The legislative framework for trade unions to operate under is also being updated. Plans aim to ensure industrial relations industrial relations are underpinned by collaboration, proportionality, accountability, and a system that balances the interests of workers, businesses and the wider public.

Many business groups have welcomed the amendments set out to the Employment Rights Bill.

Ann Francke OBE, Chief Executive Officer of the Chartered Management Institute (CMI), said:

“The Employment Rights Bill represents a significant step forward in improving conditions for the UK’s workforce. Many of these measures reflect what successful, responsible and forward-looking employers are already doing.

“CMI has welcomed the Government’s collaborative approach in progressing this Bill, working alongside both businesses and unions to find the balance needed. The real key to success, however, will be the ability of skilled managers to implement these changes, ensuring they get it right and can deliver growth and productivity benefits for organisations whilst ensuring individuals are treated fairly.“

Jane Gratton, Deputy Director of Public Policy at the BCC, commented:

“Employers will be relieved to see some amendments, at what is clearly a milestone moment for Government. It has consulted business – and this is reflected in some of the decisions on the future shape of the legislation. There is much here to welcome as sensible moves that will help ensure that employment works for both the business and the individual, including the nine-month statutory probation period and the promise of a light touch approach, as well as simplifying rules on collective consultation.

“But businesses remain cautious, and it is important to continue ensuring the Bill strikes the right balance. Employers will look forward to hearing, engaging with and shaping further detail. The government must continue its positive approach to engagement with firms and remain open to changes. Doing so will ensure this legislation is proportionate, affordable, and right for both firms and their employees.“