Boss-worker tug of war growing over Employment Rights Bill

The Government has gone back to the drawing board with the Employment Rights Bill after the House of Lords voted to make several amendments earlier this month.

It is now promising to “listen” to bosses’ feedback on the Bill. Yesterday, at the CBI conference in London, business secretary Peter Kyle announced he would hold a series of 26 consultations with firms once it becomes law.

But employment experts are warning that business considerations must be balanced with concerns from workers as the cost of living crisis continues to bite.

A balancing act

The tension is mounting over key aspects of the Bill, which was set to start rolling out from this year until 2027.

In particular, the Bill brings changes to zero-hours contracts, eligibility for Statutory Sick Pay (SSP), protection for striking workers, day one rights, and unfair dismissal.

While the changes will impact all industries, hospitality businesses are likely to feel them the most as many rely on zero-hours contracts, tipping culture, and flexible shifts.

The Government argues that the shakeup is necessary to protect workers from unscrupulous employers, and to give them more job security in whatever industry they work in. The Bill also includes protections for whistleblowers and the creation of a new body called the Fair Work Agency will monitor and enforce workplace rights.

A study in September suggested that over one million employees would enjoy greater protections thanks to the changes. The researchers from Lancaster University stated that 1.2 million workers would have been protected from “severe insecurity” in the workplace.

Why are employers concerned?

The concerns focus on two main issues – firstly, the loss of flexibility that the current set-up allows; and secondly, the costs both in terms of salary and benefits; but also compliance.

Recruitment firms have been particularly vocal about the zero-hours contract changes as they rely on workers being able to be sent into a role on an often short-term basis and then working as needed.

The Government is arguing that these workers need consistent, guaranteed hours; but major recruitment agencies, including Hays, Adecco, and Manpower, have described the changes as “unworkable”.

Kate Shoesmith, chief executive of the Recruitment and Employment Confederation (REC) , said that some employees choose these contracts “for the flexibility it provides at a time and stage in their life”, adding that any legislative changes should “not conflict with existing and hard-won protection for agency workers.”

However, the hospitality industry has called the Government out on this too, as well as arguing that rising employment costs are pushing some businesses to the edge.

What do employers need to do now?

The Bill isn’t law as yet. Instead, it is now in what experts jokingly refer to as the governmental pinball machine, where it will go back and forth between the two Houses.

However, businesses must not wait, as when the Bill does get enacted, it will quickly become law and require some hefty changes to how some businesses operate. There will also be new compliance standards.

Companies should start prepping now by reviewing their contracts and shift practices especially around sick leave and paternity / parental leave. Payroll and HR systems might also need attention to make sure they are fit for purpose for when the changes hit.

Businesses should also pay heed to the timeline on the Bill as there will be reforms over two years so it is wise to know exactly what is potentially coming.

Even with the Government asking businesses for their views, employee rights are going to change and possibly quite dramatically. Training managers and reviewing policies now will mean less pain later if and when the Bill becomes law.