KNOWLEDGE CENTRE

Employment Rights Bill : What Small Business Owners Need to Know

Employment Rights Bill : What Small Business Owners Need to Know

October 16, 2024

On 10 October 2024, the Government published its long-awaited Employment Rights Bill, meeting its 100-day deadline. Alongside the Bill, the Government released a “Next Steps to Make Work Pay” document, outlining a broader plan for future reforms. If you’re a small business owner, it’s natural to feel concerned about what this might mean for your business, especially with so much talk about increasing workers’ rights.

We’re here to help you navigate these changes and understand what lies ahead.

Key Points for Small Businesses:

The Employment Rights Bill is 158 pages long and introduces 28 new reforms, which may sound overwhelming. However, it’s important to remember that this is just the starting framework. Many of these proposals still require further development through regulations, codes of practice, and guidance. This means that while the headlines may sound alarming, you won’t need to make immediate changes just yet.

In fact, there should be plenty of time to prepare. Most reforms will only come into effect after public consultation, which is expected to begin in 2025. The Government aims for many of these changes to take place no earlier than 2026, including reforms to unfair dismissal laws. We are thinking Oct 2026, so two years after the Employment Rights Bill, we may have a new Employment Rights Act 2025. Not helpful for those of us familiar with the Employment Rights Act 1996, it would have been much kinder for HR folk if a new name was sought.

This is intended to ensure the new laws are carefully thought through and not rushed, giving you a chance to have your say.

That said, there are some changes expected sooner, like the repeal of the Strikes (Minimum Service Levels) Act 2023 and the introduction of new rights around “switching off” (ending out-of-hours work expectations) through a statutory code of practice. These could arrive alongside the Bill’s passage through Parliament.

Key Reforms That May Impact Your Business:

  • Day one rights for unfair dismissal (subject to a probationary period – the Government prefers 9 months, but this is still under consultation and we await Statutory Probationary Period rules.
  • Day one rights for paternity leave and unpaid parental leave
  • New bereavement leave entitlements
  • Flexible working becoming the default (with exceptions, using the current framework)
  • Banning exploitative zero-hours contracts, giving workers on these contracts the right to move to guaranteed hours
  • Reforms to stop fire and rehire practices
  • Strengthening redundancy processes and changes to collective redundancy consultation rules
  • New protections against sexual harassment, third-party harassment, and strengthened rights for pregnant workers
  • Revised Statutory Sick Pay provisions

These changes might seem daunting, especially for small businesses that already feel stretched. However, the Bill is designed with phased rollouts and consultation periods, meaning you’ll have time to prepare and adjust. It’s also important to remember that these changes aim to strike a balance between employee rights and business needs, and we will support you in understanding and adapting to them.

What’s Not in the Bill but might be added….

The Bill is just “phase one” of the Government’s broader plan. Future consultations are planned around ethnicity and disability pay gap reporting, changes to employment status, and reviews of parental and carers leave systems. There was also nothing in the Bill about changes to National Minimum Wage rules.

Need assistance? We’re Here to Help

If you’re worried about how these changes might affect your business, don’t hesitate to reach out to us. We’re here to provide you with practical advice, tailored specifically for small businesses like yours. You can reach us on 01527 909436.

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