For employers in the UK, it may seem like there is a lot of change to navigate, with the announcement of the Employment Rights Bill and a raft of measures outlined in the Chancellor’s Budget, which will impact workforce plans and costs. However, while there is a lot of movement, not all change is necessarily bad.

It is important to be mindful of the fact that the world of work itself has drastically changed in recent years, but legislation and Government guidance have not really followed suit – until now.
 

We are facing a bit of a ‘trial and error’ period while the Labor Government attempts to reshape employment and skills development in the country. It is a big ask, and it is unlikely that they will get everything right the first time – but that is why they are opening up consultations to businesses, trade bodies and other stakeholders.

Employment Rights Changes

The Employment Rights Bill will be subject to numerous consultations over the next two years, but we do know the core elements that the Government is planning to implement. Here are the top points that human resources (HR) teams will need to be aware of:

1. Day one rights: To allow workers access to rights such as statutory sick pay, paternity, unpaid and bereavement leave from the first day of employment. There were concerns raised that this would inadvertently lead to employers reigning in hiring. However, the details are still being fleshed out. What is important for HR teams to consider is where these rights may already be provided in the recruitment supply chain, particularly for those engaging contingent workers.

2. Zero-hour contract abolition: The intention behind this change is to prevent exploitative contracts that disadvantage the worker. However, as APSCo has put to the Government in its response, there are those in the highly skilled segment of the workforce that do not need such protections. Where professional contractors are being engaged for projects, they are highly likely to have agreed terms for project length, work delivery and payment built into contracts.

The abolition of zero hours is unlikely to impact those utilizing this segment of the workforce. It will, instead, be those utilizing agency workers that will be impacted. Again, there are ongoing consultations around how this should be shaped so that employers and workers are given a fair deal, and HR teams should work closely with any recruitment suppliers to monitor the situation and prepare accordingly.

3. Ban on fire and re-hire practices: The moral and ethical views on this have long been debated, particularly given the multiple reports of employers using this as a means of cutting employment costs. The changes in the Employment Rights Bill mean that these practices will be banned unless the firm is going into administration.

This will mean that more thought needs to go into contract variations during employment as there will no longer be the ultimate option of terminating and reoffering employment on new terms.

4. Right to request flexible working: There may have already been significant movement towards flexibility in terms of working models, but employers will have to prove any rejection of flexible working is ‘reasonable’. How this is defined in law is still a gray area, but employers will need to prepare plans to be able to accommodate more flexibility.

Budget Changes

Of course, the biggest talking point now is Chancellor Rachel Reeves’s first Budget, which outlined a raft of measures that will impact employers. The increase in National Insurance Contributions (NIC) will, of course, have an impact on expenditure, though small companies, in particular, should be aware that employment allowance has more than doubled. This means that there are a number of businesses that will see a decline in NICs once implemented.

We cannot hide from the fact that there are measures being introduced that will make it more costly for HR teams to hire. But there are other promising measures that we also need to be mindful of. The skills shortages in the UK are reaching breaking point, and plans to boost workforce numbers by getting the economically inactive back into work, along with the launch of Skills England, are all part of a longer growth strategy that businesses will reap the rewards of eventually.

But it takes investment to deliver this. In the meantime, employers should ensure they are still building a strong workforce to meet the needs of the business for the year ahead.

The transition and rollout of the Employment Rights Bill and the Budget changes will take years, so there is still time for HR teams and employers to strategize and set themselves up for the best possible success.

What will be critical during this period, though, is that all stakeholders in the recruitment supply chain are involved in any plans. Staffing businesses and outsourcing suppliers are resources to be used to navigate the changes over the next few years. They will have the connections and in-house knowledge to help end hirers – and now is the time to really tap into this.

Author Bio

Tania Bowers is the Global Public Policy Director at APSCo.

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