Employment Rights Bill

The Employment Rights Bill of 2024 introduces many new reforms that are aimed to enhance employee protections while imposing new responsibilities on employers.

Key provisions of the Employment Rights Bill and their implications for Employers

1. Flexible working requests- Employers must now accommodate flexible working requests from employees starting on day one of employment. An employer can still refuse a flexible working request, however, they must provide detailed written justifications for their refusal e.g might not be suitable for the specific business.

2. Family leave and bereavement rights- Employees now have eligibility for parental, paternity leave as well as bereavement leave. Whilst this is beneficial for the employee, this could disrupt operations of business for employers especially smaller firms.

3. Statutory sick pay- Sick pay will now start from the first day of absence and income thresholds have been removed. Employers, therefore, face higher costs especially for low-paid workers or those in physically demanding roles prone to illnesses.

4. Regulations on zero-hours contracts- Employers must offer guaranteed hours to qualifying workers and provide reasonable notice for shift changes or cancellations. These requirements will reduce operational flexibility but improve workforce satisfaction.

5. Mandatory Equality Action Plans- Larger employers (250+) are required to publish annual equality and diversity plans which adds another layer of compliance and reporting, which will require HR resources.

6. Ban on Exploitative Internships- The proposed ban on unpaid internships, may increase costs for employers, but it will also clarify the employment status of interns, reducing legal uncertainties.

7. Ban on Fire and Rehire Practices- The Bill will make it automatically unfair to dismiss an employee if the main reason for dismissal is due to the employer wanting to vary the employee’s contract. This makes is harder for employers who have genuine reasons for wanting to restructure or change the contractual terms for business reasons.

The impact the budget has on employers

1. National Living Wage increase- The National Living Wage has been increased which narrows pay gaps between age groups. This raises labour costs for employers, especially in industries like hospitality and retail where wages are usually lower.

2. Business Tax Adjustments- Corporate tax relief for green investments and training initiatives was introduced, encouraging long-term growth and sustainability. However, the overall tax burden remains high for many businesses, limiting immediate profitability.

3. Support for SMEs- Enhanced funding for digital transformation and energy efficiency upgrades provides a lifeline for small and medium enterprises (SMEs). However, accessing these benefits may require navigating complex application processes, adding to administrative burdens.

4. Infrastructure and Training Investments- The Bill emphasises increased funding for training programs. While this could address skill shortages, employers may initially face challenges in upskilling existing staff.

Overall, the Employment Rights Bill and budget has created some future challenges for employers, whilst also creating opportunities for employees. Employers must balance compliance with operational efficiency while embracing reforms that prioritise employee well-being.

If you require any advice on your employment matters, please contact our Employment Law team on 01604 936512 / 01908 953674 or email info@franklins-sols.co.uk.