Bosses expected to ‘Make Work Pay’ in new era of employment rights

The world was in the grip of the Great Depression when Franklin D. Roosevelt became US President in 1933. During his first 100 days in office, he enacted a whirlwind of legislative action to revive the flagging economy and restore the country’s shattered confidence. Fast-forward more than 90 years and jump to the UK, and the new government’s first 100 days have culminated in a series of their own ambitious reforms, enshrined by the new Employment Rights Bill.

Touted as a ‘New Deal for Working People’ – with key measures including strengthened sick pay and parental leave rights – the new legislation aims to drive growth, increase job security and improve living standards. But what does this mean for your business, and how should you prepare for the future?

What are the government’s new measures?

Employer responsibilities have heightened in recent years, with organisations under obligation to provide their workers with greater financial support and wellbeing intervention. And with the Labour government unveiling its plans to ‘Make Work Pay’ through the new Employment Rights Bill, employers can expect to face even higher levels of accountability.

The Employment Rights Bill will carry forward a range of reforms, from ending zero-hours contracts and fire and rehire tactics, to establishing improved day one rights for millions of workers. Some of the key measures to be aware of include:

• Day one protection from unfair dismissal, while allowing employers to operate probation periods
• Day one entitlement to paternity leave and unpaid parental leave, along with a statutory entitlement to bereavement leave
• A ban on ‘exploitative’ zero-hours contracts and fire and rehire practices
• Strengthened statutory sick pay, removing the lower earnings limit for all workers and cutting out the waiting period before sick pay kicks in
• A greater burden on employers to make flexible working the norm where applicable

Other proposed reforms, such as the much-anticipated ‘right to switch off’ (a ban on out-of-hours contact) and measures dedicated to pay equity, are currently in the pipeline and set to be codified in wider policy.

How will employers be impacted?

The newly-introduced measures have been described by the government as “the biggest upgrade to rights at work for a generation”, but workers will have to wait a little longer before benefiting from them – it’s believed that some of the key reforms won’t take full effect until late next year, or even 2026.

While disappointing news for workers and trade unions, this delayed action does give organisations more time to consider the reforms’ potential impact on their people policies, and the opportunity to re-examine the rights they currently offer staff.

In particular, employers will want to keep up to date on how the new probationary rules will take shape – and potentially influence their hiring decisions. Currently, employees must complete a two-year qualifying period before gaining dismissal protection, but the newly suggested nine-month period could make evaluating the right candidate even more critical.

The ban on zero-hours contracts will also raise a number of questions, including what exactly is considered "exploitative", and the impact this will have on industries that see seasonal spikes in demand, such as hospitality.

Additionally, with our recent research revealing that almost half (47%) of employers confess managers within their organisation currently contact staff outside of working hours, the proposed ‘right to switch off’ measures, if delivered, will need to be handled with care. Employers may be required to develop a greater understanding of their workforce and individual working arrangements, including how to accommodate staff who work flexible or condensed hours.

How should employers respond?

There’s still a degree of uncertainty regarding the expectations and realities surrounding the proposed measures, yet their announcement should serve as a prompt for employers to refine their workplace strategies in what remains a tight hiring market – and one where candidates are increasingly aware of both their worth in the job market and rights in the workplace.

Moreover, the proposed reforms will likely have a reciprocal benefit for employers looking to improve their workplace cultures and bolster their talent attraction and retention efforts, with many already being practices that organisations should be modelling where applicable.

Take the new expectations regarding normalised workplace flexibility, for example. While it’s unclear how heavily this obligation will be enforced, the reported wellbeing and retention benefits of flexible working are already apparent. What’s more, survey data from our 2024 Diversity, Equity & Inclusion report shows that 79% feel flexible working options are positively driving the creation of more diverse and inclusive workplaces.

In a similar vein, the proposed ‘right to switch off’ plans are an important opportunity for organisations to re-think how they approach out-of-hours communication and support employee wellbeing.

Rather than waiting to see how and when the new measures will take effect, employers should look to stay ahead of the curve by ensuring that their people are put front and centre of business decisions.

Make them a deal they can’t refuse

Whether the new reforms carry the same lasting legacy as Roosevelt’s New Deal remains to be seen, and there’s clearly a lot more detail to be worked through on these legislative changes. What’s more certain though, is that organisations who make a conscious effort to put their people first and promote inclusive workplace practices will be more likely to find and retain the skills they need to secure their future success.

Looking to solve your talent and recruitment challenges in an evolving world of work? Get in touch with us today.

And for expert recommendations on supporting diverse workforces and embedding inclusive hiring processes, take a look at our 2024 Diversity, Equity & Inclusion report.