Plan to Make Work Pay and Employment Rights Bill

Thursday 10th October 2024 Written Statements

[The Secretary of State for Business and Trade (Jonathan Reynolds)]

Delivering the Government’s Plan to Make Work Pay—Introduction of the Employment Rights Bill

The plan to make work pay sets out a significant and ambitious agenda to ensure workplace rights are fit for a modern economy, empower working people, and contribute to economic growth. Today, the Government are fulfilling the manifesto commitment to bring forward legislation within 100 days of entering office by introducing the Employment Rights Bill.

Upgrading the UK labour market so it is fit for our modern economy is a key step to kickstarting economic growth, alongside other planks of our modern supply side approach, including planning reform, kickstarting a skills revolution, a modern industrial strategy and a plan to tackle inactivity. The Bill will support the Government’s mission to increase productivity and create the right conditions for long-term sustainable, inclusive, and secure economic growth by giving the British public the work, wages, prosperity, security, dignity, and the living standards that everyone in Britain needs and deserves. This is a comprehensive Bill which, once implemented, will represent the biggest upgrade in employment rights for a generation. It will raise the minimum floor of employment rights, raise living standards across the country and provide better support for those businesses who are engaged in good practices.

Benefits of the Employment Rights Bill

This is a pro-worker, pro-business plan. The Government will tackle head-on the issues within the UK labour market that are holding Britain back. The plan to make work pay sets out a vision for modern and fair employment protections that will set the country up for the future.

Supporting families

Many businesses already provide good, family-friendly conditions for their workers because they know that doing so improves productivity, morale, and retention. This Bill will increase the baseline set of rights for employees with parental or other caring responsibilities, enabling more working parents to get on at work, and achieve a better work-life balance—whether that is raising children, improving their own wellbeing, or looking after a loved one with a long-term health condition. Businesses will gain too where this boosts increased workforce participation, helping employers fill vacancies. Measures will increase the likelihood of a request for flexible working arrangements to be granted, introduce day one entitlement to paternity leave and unpaid parental leave, and introduce a statutory entitlement to bereavement leave.

Despite existing protections, we know it is not always a level playing field, and too many women are being held back at work. By expanding gender pay gap reporting requirements, requiring large employers to produce action plans on how to address their gender pay gaps and support employees through the menopause, and strengthening rights for pregnant workers and new mothers, this Bill will put gender equality front and centre of our employment legislation. These measures will support women’s employment participation and tackle the gender pay gap.

Improving rights and addressing one-sided flexibility

Too many workers experience low-paid, insecure and poor-quality work. This Government believe that all workers should be able to enjoy fair rights, benefits and security in the workplace, no matter who they work for. The Government intend to support businesses so they are no longer undercut by those with low standards. By introducing day one protection from unfair dismissal (while allowing employers to operate probation periods), increasing protection from sexual harassment in the workplace, ending unscrupulous fire and rehire and fire and replace practices, strengthening rights and requirements for collective redundancy consultation, and banning exploitative zero hours contracts, we will raise the bar for workers and provide a baseline of security in work. The plan to make work pay sets out a vision for better, modernised, and fairer employment protections that will set the country up for the future.

Improving take home pay and conditions at work

We have already made progress in championing fair pay by changing the Low Pay Commission’s remit to take into account the cost of living for the first time. The Bill will go further, introducing powers to create a fair pay agreement in the adult social care sector, and reinstating the School Support Staff Negotiating Body. We will also be reinstating and strengthening the two-tier code for public sector contracts, helping ensure that employees working on outsourced contracts will be offered terms and conditions no less favourable to those transferred from the public sector. We will strengthen statutory sick pay, removing the lower earnings limit to make it available to all employees, and removing the waiting period so that SSP is paid from the first day of sickness absence.

A better enforcement system

While the vast majority of employers champion the spirit of good business and workers’ rights, some fall short. By bringing together the various agencies and enforcement bodies that enforce employment rights into the new Fair Work Agency, we will ensure that where employers are not doing what is right, a simplified and strengthened enforcement system will protect workers and ensure justice in the workplace.

Voice at work

This Government believe that workers should have a voice at work, and trade unions are essential for tackling insecurity, inequality, and low pay. That is why this Bill will focus on strengthening the rights of trade union representatives and bring archaic and prohibitive trade union legislation into the 21st century. We are bringing forward multiple measures to protect workers from dismissal and blacklisting for trade union activity, ensure workers understand their right to join a trade union, to simplify the statutory recognition process, and to bring in a new right of access for union officials to meet, represent, recruit, and organise members in workplaces. As previously announced, we will repeal the Strikes (Minimum Service Levels) Act 2023 and the Trade Union Act 2016.

The plan to make work pay was developed through close engagement with business and trade unions, and we are committed to continuing with this approach through full and comprehensive consultation on the implementation of the plan.

Next steps to make work pay

The Government are committed to implementing their plan to make work pay in full. Not all the commitments within make work pay require primary legislation to implement; in many areas the Government have existing powers to deliver on commitments through secondary legislation and non-legislative means. In addition, the Government have been clear that some parts of the plan will take longer to review and implement. In order to provide Parliament, workers and business clarity on how Government intend on delivering on the plan, we are today publishing the “Next Steps to Make Work Pay” paper. This sets direction and gives businesses and workers confidence in our long-term programme of work. Work is already under way to prepare consultations on several aspects of the plan.

As is typical with employment legislation, further detail on many of the policies in the Bill will be provided through regulations after Royal Assent. We expect to begin consulting on these reforms in 2025, seeking significant input from all stakeholders, and anticipate this meaning that the majority of reforms will take effect no earlier than 2026. Reforms of unfair dismissal will take effect no sooner than autumn 2026. We will continue working with partners right up to implementation. Advice and support will be available to businesses to support this.

The Government will continue to work hand in hand on these changes with business, trade unions and civil society in a spirit of partnership to get Britain moving again.

[HCWS117]