What does the proposed employment rights bill mean to you?
The labour Government has pledged to introduce a new Employment Right Bills as part of their broader Making Work Pay initiative. With Business Secretary Jonathan Reynolds saying that:
“business and workers will always help to shape the ambitions of government, including our plan to Make Work Pay, to ensure it boosts economic growth and creates better working conditions for all”.
The bill is designed to support and preserve workers rights, but what does this mean for employers and how will it impact your business?
Key points from the Employment Rights Bill
- To ban the exploitation of zero hours contracts by banning any contracts that do not offer guaranteed regular hours.
- To end any fire and rehire practices.
- The introduction of basic employment rights from day one for parental leave, sick pay and protection from unfair dismissal.
- The creation of a Single Enforcement Body to ensure that all employments rights are upheld by strengthening the collective voices for workers, including through any trade unions.
- Changing the remit of the independent Low Pay Commission to ensure that the minimum wage is a genuine living wage by making sure that it takes account of the cost of living.
- The removal of age bands for minimum wage so that all adults are entitled to the same minimum wage, resulting in a potential pay rise to hundreds of thousands of employees.
What impact could your business feel?
In theory, having a clear and uniform framework for employment rights across all employees should make everything easier for both employees and employers, with everyone knowing where they stand.
However, bringing in new regulations and enhanced employment rights could result in additional challenges for smaller businesses.
For example, as a business you may have taken on a new employee and after one day they go on sick leave for a month. With the new Employment Rights Bill they will be entitled to sick pay, putting pressure on the cashflow of any small business.
The removal of age-related minimum wage could also result in a large increase in wage costs for any business who currently employs anyone who falls into one of the lower brackets. Especially for those businesses who historically have a young workforce or take on several young workers.
In general, the proposed bill could mean that taking on an employee comes with greater potential risk to a small business and could end up dissuading some owners from taking on new staff.
If you’d like more information on the proposed bill or some guidance on how the changes could end up affecting your business, please get in touch with us.