Explained: What is Labour’s new Employment Rights Bill, and what does it mean for Bristolians?
There has been lots of recent media hype over Labour’s flagship Employment Rights Bill. Introduced to Parliament on 10 October 2024, the government has called it the “biggest upgrade to rights at work for a generation”.
But what exactly is the Employment Rights Bill? What does the proposed legislation contain and how will it affect the lives of ordinary people, including here in Bristol? After years of falling wages, high living costs and austerity, will the bill make any difference?
Why is the Employment Rights Bill important?
The Employment Rights Bill was brought to Parliament by the Labour government in October with the stated aim of improving workers’ rights across England, Wales and Scotland. (Northern Ireland has its own devolved system of employment law, so the bill will not apply there).
Labour declared in its 2024 manifesto its intention to create a ‘New Deal for Working People’. The Employment Rights Bill was introduced within the government’s first 100 days of office, as previously promised.
“When Labour was in opposition, there were a number of iterations of proposed legislation policy changes for when [it was in] government to update workers rights”, says Jack Kellam, head of operations at the Autonomy Institute, which focuses on the future of work, economic planning and tackling the climate crisis. “So I think lots of the interest around this has been seeing how a Labour government is going to live up to things it put into its policy documents and manifesto before the election.”
The UK has a poor record around trade union rights, and workers rights more generally. “[For] three, four decades workers’ rights have gone backwards, or not been updated to reflect changing economic realities”, says Kellam. “So in that context, it is a low bar for a bill to be the biggest upgrade of workers rights in a generation.”
But, he adds, “There’s lots of really encouraging stuff in there. It would be wrong to say it’s not a step forward.”
What are some key takeaways from the bill?
The Employment Rights Bill contains 28 individual reforms to employment legislation, including:
- Guaranteed hours for workers on zero-hours contracts for those that want them (they can also choose to stay on zero hours)
- ‘Day one’ rights including the right to claim unfair dismissal, ask for flexible working arrangements and take unpaid parental leave
- The ability of workers to qualify for statutory sick pay from the first day they’re ill and even if they earn under £123 per week (previously the threshold)
- The establishment of a Fair Work Agency, to ensure workers’ rights are enforced
- Increased protections from sexual harassment at work
- Repealing the 2016 Trade Union Act (which introduced limits on the rights of trade unions to strike)
On the surface many of these proposals sound encouraging, but some argue they do not go far enough. Sharon Graham, the general secretary of major union Unite, said, “This Bill is a significant step forward for workers but stops short of making work pay.” On zero-hours contracts, which offer no guaranteed hours, Unite sees the option for workers to remain on these if they choose as evidence of “failure to ban” them.
Zero-hours contracts disproportionately affect younger workers, especially in sectors such as hospitality, retail, construction, and health and social care. Trades Union Congress (TUC) research shows that 14% of workers aged 16-25 in the South West are on zero-hours contracts, part of a pattern of wider job insecurity affecting more than 4 million UK citizens.
“Prior to the election [the government said] it would ‘ban exploitative zero hours contracts’,” explains Kellam. “This is one of these bits where it was unclear whether that was banning all zero-hours contracts, or a subset of [them].
What do business and trade unions say?
The Employment Rights Bill was written through consultation with trade unions, as well as representatives from businesses. Labour claims to have a “pro business and pro worker” approach.
If it was to give everyone a genuine living wage, that would be a significant difference to a lot of people
Jack Kellam, the Autonomy Institute
The TUC – an umbrella group of most major unions, which also produces research and policy recommendations – has largely been in favour of the bill. Paul Novak, the TUC’s general secretary has called it “a real moment of hope for working people”.
Another major union, GMB, has been cautiously supportive, calling the bill “a significant and groundbreaking first step to giving workers the rights they’ve been denied for so long”, but added that “there is a long way to go”.
The Confederation of British Industry (CBI), which represents business interests, merely gave a short, lukewarm statement saying the government “deserves credit for its willingness to engage with businesses and unions on how to make a success of the Plan to Make Work Pay”.
How will the bill benefit workers in Bristol?
So what does all this mean for ordinary people, particularly in Bristol? Though Bristol remains one of the wealthier core cities (the largest cities in the UK outside London), statistics show 14% of Bristolians live in income deprivation, while 8% of households have experienced moderate to severe food insecurity.
Bristol is also now one of the UK’s most expensive cities, with rents increasing by 34% between December 2019 and May 2024, and a house price-to-income ratio of more than 10.
One proposal in the Employment Rights Bill is that the Low Pay Commission (the body that advises the government on what rate to set the National Living Wage and the National Minimum Wage) will have to take into account the cost of living when setting the minimum wage. This will entail an increase in the National Minimum Wage, though the rate is yet to be disclosed.
Kellam argues this is one of the most promising proposals for Bristolians on low incomes. “If it was to give everyone a genuine living wage, that would be a significant difference to a lot of people,” he says.
What’s missing from the bill?
Kellam highlights several rights missing from the bill. One is the so-called ‘right to switch off’, designed to “protect workers from out-of-hours communication from their workplaces and the obligation to work effectively unpaid overtime outside their contracted hours”.
There are versions of this in countries including France, Portugal, Spain, Australia, India and Chile. Labour proposes instead “some form of guidance for employers – for want of a better way of saying it: ‘please don’t contact your workers outside of working hours’ – and to draw up guidance in certain settings”.
The bill also lacks a single status for workers. “Lots of people in the gig economy are employed effectively as independent contractors rather than as employees or workers,” says Kellam. “Labour in opposition said it was planning to try and close the gaps that exist between the legal protections, and to give a single status of worker rather than contractor – that’s been pushed down the line.”
Another issue is how these reforms will be enforced. “There is a bit of concern about how some of these rights are going to look in practice – whether they’re going to have full statutory backing in law, whether they’re going to have proper enforcement mechanisms.”
Overall, Kellam argues Labour could afford to be a bit more ambitious in terms of “expansive, bold thinking for what workers’ rights look like in the economy we live in”. This includes adjustments for an increasingly automated and digital world of work, and a willingness to explore ideas such as a four-day working week, currently being explored in Scotland.
When will the bill make a difference to my life?
The short answer is – it’s too early to say. The bill contains many promising elements, but most won’t become law until 2025 or 2026. The process of passing legislation through Parliament allows for some provisions in the bill to be strengthened, but some may also be weakened or watered down.
“It’s good Labour has recognised [workers’ rights] as a priority and put it top of its legislative programme”, says Kellam. “Nevertheless, we know we’re starting from such a low base, that trying to build up the sorts of protections workers need in the contemporary economy will require a huge amount of work [and] a degree of boldness that it appears the government isn’t quite willing to show yet.”
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