UK to Publish Workers’ Rights Bill Fought Over by Unions, Firms
(Bloomberg) -- Keir Starmer’s new UK government unveils a package of new workers’ rights on Thursday, one of the Labour Party’s key promises in its election-winning manifesto that seeks to balance competing demands of trade unions and business leaders he’s been courting for the past four years.
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But the content of the Employment Rights Bill has been subject to intense bartering since Deputy Prime Minister Angela Rayner first announced her “New Deal for Working People” in 2021, when the party was in opposition. Unions tried to ensure worker protections weren’t watered down, and executives warned about excessive burdens. Some of the original promises — such as the so-called “right to switch off” — won’t be included in the bill, but will be brought in as non-binding codes of practice, or in other legislation.
The bill’s publication is unlikely to end all the wrangling. Some measures will be subject to consultation, with the majority not expected to be implemented until autumn 2026. Below are some of the key measures and exclusions:
Zero-Hours Contracts
Rayner pledged to ban so-called zero hours contracts — which give workers no guaranteed hours — when she first announced her plans. She and Business Secretary Jonathan Reynolds have since watered that down, recognizing that some workers like the flexibility afforded by the contracts.
The bill will instead give workers the right to request a contract shaped around the hours they have regularly worked in a 12-week reference period. Some businesses had pushed for the reference period to be extended to six months.
Sick Pay
In perhaps the biggest changes of the package, the bill will introduce a raft of entitlements from day one of employment, abolishing the two-year wait for certain rights. That includes the right to statutory sick pay for all workers from the first day they are unwell. Currently, workers can only claim it from day four of being ill, while those earning less than £123 ($161) a week can’t claim it at all. The bill will offer a lower level of sick pay for the latter, to avoid incentivizing sick leave.
Parental Rights
The legislation will extend the right to claim paternity leave and unpaid parental leave from day one in a role, bringing both in line with maternity leave. These are all unpaid rights and the bill makes no changes to maternity or paternity pay entitlements - the government is planning a bigger review of maternity and paternity pay next year.
Protection Against Unfair Dismissal
The right to protection from unfair dismissal from starting out in a job has been subject to much negotiation between businesses and trade unions. Employees will be able to bring unfair dismissal claims from day one in their jobs under the new bill, ending the two-year wait for that right that some workers are currently subject to.
The bill will still permit probation periods, during which it will still be possible for employers to dismiss workers they deem unsuitable for the role. But in a significant change, the government is seeking to cap the length of probation periods at nine months, subject to consultation.
Fire and Rehire
To the dismay of some trade unions, Labour modified a proposal they held particularly dear — the ending of fire and rehire practices, whereby companies dismiss and bring back staff often on lower pay or worse conditions.
Since that promise of an outright ban, the wording of Labour’s plans changed to include a caveat that still allows employers to conduct restructures in exceptional circumstances. The bill will extend protections against unfair dismissal to cases of fire and rehire.
Sharon Graham, general secretary of the trade union Unite, said the revised package “has more holes in it than Swiss cheese.”
Labour has already strengthened the code of practice on dismissal and re-engagement, giving employment tribunals the power to apply an uplift of 25% of an employee’s compensation if an employer is deemed to have unreasonably failed to comply with the code. It will consult on how it can go further.
Key Pledges Delayed, Watered Down
Some of Rayner’s original promises won’t be included in the bill. Some will be subject to further consultation, while others will be tacked onto existing legislation or delivered via non-binding codes of practice. In a document called “Next Steps,” the government will outline plans including:
Right to Switch Off Labour has watered down ambitions to give employees a legal right to ignore work demands outside office hours, as Bloomberg first reported in August. Ministers instead will push for a code of practice for businesses. The government is modeling its approach on Belgium and Ireland, which have guidelines on out-of-hours communications, in contrast with France and Portugal where the right to disconnect is enshrined in law.
Worker Surveillance Labour had committed to protecting workers from the use of surveillance technologies by their employers, but this will now be excluded from the legislation, as Bloomberg reported last month. Instead, the government is looking for other ways it could introduce measures around surveillance, for example via employment codes of practice.
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