UK workers are to get more job security and improved access to sick pay under new plans announced by the government. The measures have been welcomed by the British Chambers of Commerce but the Federation of Small Businesses has warned that they could be detrimental for small firms.
The government has tabled amendments to the Employment Rights Bill in line with its plan to "make work pay". It means that new rules will be introduced on zero hours contracts, Statutory Sick Pay, umbrella companies and redundancies.
The British Chambers of Commerce (BCC) has described the measures as "sensible moves" but the Federation of Small Businesses (FSB) says the plans are a "threatening approach to hundreds of thousands of small employers". Gary Smith, GMB general secretary, said: "It's far from perfect, but this bill is a massive step forward for the lives and wellbeing of working people."
A government impact assessment suggests that the reforms will "help to raise living standards across the country and create opportunities for all" and they're also likely to have "a positive but small direct impact on economic growth". The government describes the reforms as both "pro-business and "pro-worker".
"We are turning the tide - with the biggest upgrade to workers' rights in a generation, boosting living standards and bringing with it an upgrade to our growth prospects and the reforms our economy so desperately needs." Angela Rayner, deputy prime minister.
New employment rights for UK workers
The proposed employment rights amendments include:
Sick Pay: Statutory Sick Pay will become a legal right for all workers for the first time. Up to 1.3 million employees on low wages who find themselves unable to work due to sickness will either receive 80% of their average weekly earnings or the current rate of Statutory Sick Pay - whichever is lower. Employees will also have a right to Statutory Sick Pay from the first day of sickness absence.
Zero-hours contracts: In a crackdown on zero-hours contracts, all workers, including up to 900,000 agency workers in the UK, will be able to access a contract which reflects the hours they regularly work. This will improve job security for working people and give them reasonable notice of shifts and proportionate pay when shifts are cancelled, curtailed or moved at short notice. The government also promises to retain the "necessary flexibility for employers in how they manage their workforces".
New rules on collective redundancy: The government will increase the maximum period of the protective award from 90 days to 180 days and issue further guidance for employers on consultation processes for collective redundancies. An Employment Tribunal will be able to grant larger awards to employees for an employer's failure to meet consultation requirements.
Umbrella companies: The government will act to ensure that workers can access comparable rights and protections when working through an umbrella company as they would when taken on directly by a recruitment agency.
The Fair Work Agency will take action against rogue employers and provide support to the majority of businesses who want to do right by their staff.
"Everyone deserves security and respect at work. These common-sense reforms will improve the quality of jobs in this country, boost growth and put more money into people's pockets. Policies like banning exploitative zero-hours contracts, ensuring protection from unfair dismissal from day one, and tackling 'fire and rehire' are long overdue and necessary." Paul Nowak, TUC general secretary.
These changes to UK employment law have been broadly welcomed by the British Chambers of Commerce. Jane Gratton, BCC deputy director of public policy, said: "There is much here to welcome as sensible moves that will help ensure that employment works for both the business and the individual." However, she added: "Businesses remain cautious, and it is important to continue ensuring the Bill strikes the right balance … The government must continue its positive approach to engagement with firms and remain open to changes. Doing so will ensure this legislation is proportionate, affordable, and right for both firms and their employees."
FSB voices concerns on behalf of small employers
Tina McKenzie, FSB policy chair, has warned that the changes will be tough for the UK's smallest employers. She said: "Ministers must put the work in and understand the damage that taking such a threatening approach to hundreds of thousands of small employers will do. At the end of the day, small business owners are out there trying to grow their businesses, create jobs and contribute to their communities.
"The chief concerns among small businesses remain the threat of being taken to court as soon as they take a risk hiring someone, the affordability of proposals on sick pay and the sheer unworkability of other parts of this mass of complex new rules. We hope the government will move from asserting that these changes are pro-business to making that a reality."
Written by Rachel Miller.