Employment Rights Bill

Employment Rights Bill 2024 – Key Changes and Employer Implications

The Employment Rights Bill 2024 introduces several significant reforms designed to enhance employee protections while placing additional responsibilities on employers. Below is a breakdown of the key provisions and how they may impact businesses across the UK.

Key Provisions of the Employment Rights Bill

1. Flexible Working Requests – Employees can now submit flexible working requests from day one of employment. While employers can still refuse, they must provide a clear, written justification—such as the request being incompatible with operational needs.
2. Family Leave and Bereavement Rights – Employees are now entitled to parental, paternity, and bereavement leave. Though beneficial to employees, this could present challenges for smaller employers in terms of continuity and staffing.
3. Statutory Sick Pay – Sick pay now begins from the first day of absence and is no longer subject to income thresholds. This reform increases employer costs, particularly in physically demanding sectors where illness-related absences are more common.
4. Zero-Hours Contract Regulations – Employers must now offer guaranteed hours to qualifying workers and provide reasonable notice for shift changes or cancellations. This reduces operational flexibility but enhances job security for staff.
5. Mandatory Equality Action Plans – Businesses with 250+ employees must now publish annual equality and diversity reports. This adds another compliance layer, requiring additional HR input and resource allocation.
6. Ban on Exploitative Internships – The bill proposes a ban on unpaid internships. While this may increase costs for employers, it ensures better clarity around intern rights and reduces the risk of legal disputes.
7. Ban on Fire and Rehire Practices – It will be automatically unfair to dismiss an employee solely to change their contractual terms. This limits employer flexibility during restructuring and may complicate legitimate contract negotiations.

How the 2024 Budget Impacts Employers

1. National Living Wage Increase – The rise in the National Living Wage helps close age-based pay gaps but also increases labour costs, particularly in industries like retail and hospitality.
2. Business Tax Adjustments – New tax reliefs for green investments and training aim to promote sustainable business practices. However, many employers may still feel the pressure of an overall high tax burden.
3. Support for SMEs – Additional funding for digital upgrades and energy-efficient systems supports long-term SME growth. However, navigating these grants and schemes may introduce extra administrative complexity.
4. Infrastructure and Training Investments – Funding for vocational training and upskilling is a long-term benefit but may initially require employers to invest time and effort in retraining or reallocating staff.

Conclusion: While the Employment Rights Bill and 2024 Budget introduce reforms that enhance employee protections and workplace fairness, they also pose new challenges for employers. Businesses must now strike a balance between compliance, cost-efficiency, and employee well-being to remain competitive and sustainable.

If you require tailored advice on employment law matters, please contact our Employment Law team on 01604 936512 / 01908 953674 or email [email protected].