What the Employment Rights Bill means for your job

New rights for workers have edged closer to becoming law after passing the first parliamentary hurdle this week but it is unclear if proposals for a right to switch off have been scrapped.

One of the Labour government’s flagship pieces of legislation is the Employment Rights Bill, which aims to give workers sick pay, parental leave and flexible working rights from the day they start a job rather than having to wait to pass a probation period.

The Bill was first unveiled in Parliament last October, putting forward 28 workplace reforms, including “day one rights” for paternity, parental and bereavement leave as well as sick pay.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

The government had previously promised a “right to switch off” to ban bosses from contacting staff outside office hours, but that has not appeared in the legislation despite queries from MPs during debates.

Despite this, MPs backed the Bill at its third reading in the House of Commons last night by 333 votes to 100.

It will now be sent for scrutiny in the House of Lords.

Deputy prime minister Angela Rayner said: “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.”

It will be a few months before any of the proposals become law, but here is what the Employment Rights Bill could mean for your job.

Day one rights

Under current employment laws, staff are protected against unfair dismissal after two years and may only qualify for certain benefits after a few months or even years.

The legislation will remove the existing two-year qualifying period for protections from unfair dismissal and the government will also consult on a new statutory probation period for a company's new hires.

Rather than waiting to pass a probation period, staff will have rights from day one for paternity, parental and bereavement leave.

Statutory sick pay will also be strengthened, removing the lower earnings limit for all workers and cutting out the waiting period before sick pay kicks in, the government said.

Pregnant women and new mothers returning to work will also be protected from dismissal whilst pregnant, on maternity leave and within six months of returning to work.

A right to flexible working

Working from home or more flexibly has become popular since the pandemic but there is currently no legal requirement for employers to support this.

The Employment Rights Bill will make flexible working the default for all, unless the employer can prove it’s unreasonable.

Additionally, the Employment Rights Bill will require large employers with 250 or more employees to produce Equality Action Plans on how they will support staff going through the menopause.

The government will also publish guidance to help smaller employers make changes in the workplace such as better uniforms to help with hot flushes, flexible working and recording menopause-related leave and absence.

“From an employee perspective flexible working typically improves motivation, especially for colleagues motivated by autonomy,” says Carole Gaskell, a leadership expert at Full Potential Group.

“This is something we see the multi-generational workforces struggling with. The younger generation are more vocal and decisive about ensuring they get their need for flexibility met."

Will there be a right to switch off?

There were reports that this legislation would ban the practice of staff being contacted out of hours or on weekends by their bosses.

A consultation was promised last October but the proposal hasn’t been mentioned in the Bill’s amendments and the government has since suggested there will be a Code of Practice on the issue.

Other reports suggest the proposal has been scrapped.

What will the Employment Rights Bill mean for businesses?

The changes have been described by deputy prime minister Angela Rayner as the "biggest upgrade to workers' rights in a generation".

Watt says businesses should be reassured that increasing statutory sick pay, and maternity and paternity pay will impose no additional costs as it is paid by the government.

But there are warnings that the new requirements may make employers more wary about taking on staff.

“Whilst the changes are positive for employees there is a risk that the changes will not have the desired effect of boosting levels of employment and living standards,” says Vicky Schollar, head of employment at law firm Gardner Leader.

“Although larger employers may be able to absorb the additional costs associated with the changes, smaller employers are likely to struggle. This along with the introduction of day one rights for unfair dismissal and strict rules on probationary periods may lead to a downturn in recruitment and, in turn, hamper business growth.

“There is also a risk that employers will see an increase in claims for unfair dismissal, leading to more time and costs in dealing with them.”

The Bill still needs to make it through the House of Lords and so it could be months before any changes are introduced. Many don’t expect the legislation to be enacted until 2026.