Government outlines details of workers' rights plan

The Labour government set out its plans for a sweeping package of new workers' rights on Thursday including plans to end fire-and-rehire practices and strengthening sick pay in the biggest change to employment law in a generation.

The contents of the Employment Rights Bill have been debated for months and will be closely watched by trade unions, who traditionally fund the governing Labour Party, and business leaders, who are concerned about some of the changes.

In the bill that will be laid before parliament on Thursday, bringing forward 28 individual employment reforms, the government will propose a raft of protections for millions of workers such as granting new rights on parental leave, sick pay from day one of employment, and banning zero-hours contracts, which give workers no guaranteed hours.

Accompanying this will be measures to help make the workplace more compatible with people’s lives, with flexible working made the default where practical. Large employers will also be required to create action plans on addressing gender pay gaps and supporting employees through the menopause, and protections against dismissal will be strengthened for pregnant women and new mothers.

A new Fair Work Agency bringing together existing enforcement bodies will also be established to enforce rights such as holiday pay and support employers looking for guidance on how to comply with the law.

But some of the key details of the new bill are still to be worked out, and the government appeared to back away from some pre-election promises such as giving employees a legal right to ignore work demands outside office hours and simplifying their employment status.

Instead, the government said it would consult on employees' right to ignore work outside of normal hours and introducing a single status of worker to end the practice where some staff are labelled self-employed, which allows companies to save on costs such as social security payments.

The new law will be prime minister Keir Starmer's biggest reform since winning a landslide election victory in July. The government framed the plans as the best way to avoid widespread industrial action that has disrupted services over the last two years.

"The best employers know that employees are more productive when they are happy at work," the business minister Jonathan Reynolds said in a statement.

"This upgrade to our laws will ensure they are fit for modern life, raise living standards and provide opportunity and security for businesses, workers and communities."

Last month Reynolds, who has been a key figure in repairing Labour's damaged relationship with the business community, sought to give reassurance that day one rights for workers would not remove the ability for employers to use probation periods for new workers.

The government said the exact length of probation periods will also be subject to consultation.

Retailers express support

The retail sector has expressed a largely positive response to the government's new employment rights bill.

Shirine Khoury-Haq, chief executive of the Co-op, said they “support the government’s ambitions to strengthen rights for workers and value the co-operative approach to involve employers in the reforms.”

The retailer has already put in place policies like bereavement leave, day one right to request flexible working arrangements, and menopause support, which Khoury-Haq said are making a positive impact at the Co-op.

“Being able to support colleagues when they need it, and in particular women, parents, and carers, helps retain valuable talent and makes good business sense. We look forward to continuing to work with the government to make work pay and to deliver economic growth,” Khoury-Haq added.

Simon Roberts, chief executive of Sainsbury’s, said: “As one of the UK’s largest employers we put our colleagues at the heart of everything we do. We see the clear link between engaged, motivated colleagues and business performance and that is why we have increased colleague pay by over 50 per cent in the last five years.

“We share the government’s vision of making work pay, enabling growth and driving productivity. We welcome today’s announcement and government engagement with business to date and look forward to seeing progress on business rates reform, which would deliver real benefits for our colleagues, customers and communities.”

Helen Dickinson, chief executive of the British Retail Consortium, representing an industry employing three million people, expressed support for the bill, saying that “the industry stands ready to work with the government to ensure these reforms are a win-win for employers and colleagues, and maximise employment opportunities, investment, and growth.”

Dickinson added that many of the bill’s provisions, such as stopping exploitative contracts and promoting flexible work, are already standard practices for responsible retailers.

“Introducing these standards for everyone means good employers should be competing on a level playing field. We look forward to engaging the government on the details, including around seasonal hiring and the use of probation periods,” she added.