Bills & proposals

Upcoming changes to be aware of

The Employment Rights Bill

1. Zero-hour contracts The bill proposes to eliminate zero-hour contracts, which may be deemed exploitative, ensuring workers have contracts that reflect their actual working hours and provide reasonable notice for shift changes.

2. Fire and rehire It seeks to reform the law to address the controversial “Fire and Rehire” practices, aiming to provide effective alternatives to avoid them.

3. Day-one rights The bill guarantees day-one rights for all workers, including parental leave, sick pay, and protection against unfair dismissal.

The Employment Rights Bill officially came into effect on 10 October 2024, introducing significant reforms to strengthen workers’ rights and address unfair employment practices.

While the bill is now law, further detail on many policies will be introduced through regulations following Royal Assent. To support this, the government plans to consult widely in 2025, seeking feedback from stakeholders on several areas of reform. Some consultations will start by the end of this year, including topics like zero-hour measures for agency workers, updates to trade union legislation, and adjustments to Statutory Sick Pay.

With most reforms expected to take effect no earlier than 2026, the government is committed to giving businesses sufficient time to prepare. Extended timelines and guidance will be provided where needed to ensure a smooth transition for organisations. Here's a recap of the bill's key points:

4. Statutory Sick Pay It plans to remove the lower earnings limit for Statutory Sick Pay, making it accessible to all workers immediately, without any waiting period.

5. Flexible working Flexible working arrangements will become the standard from the first day of employment, with employers expected to make reasonable accommodations.

6. Protection for new mothers The bill makes it unlawful to dismiss a new mother within six months of returning to work, barring specific exceptional circumstances.

7. Single enforcement body A new Fair Work Agency will be established to oversee the enforcement of workplace rights.

8. Fair pay agreement There will be a fair pay agreement introduced for the adult social care sector, with the possibility of extending this to other sectors in the future.

9. Trade union legislation The bill will update trade union legislation, lifting restrictions on trade union activities and encouraging good faith negotiations.

10. Statutory recognition It will simplify the process for workers to gain access to trade unions, ensuring easier statutory recognition.

Neonatal care update

Employers should now prepare for the official implementation of the Neonatal Care (Leave and Pay) Act, expected as early as April 2025.

HMRC’s Software Developer Support Team (SDST) has already laid the groundwork for this transition, and payroll product teams are actively implementing these changes. Keep an eye out for further updates from HMRC’s SDST.

It's essential for employers and payroll providers to stay on top of these developments, updating payroll systems in advance to support this new allowance. Doing so ensures compliance and extends the Act’s intended support to employees who need it most.

To recap, the Neonatal Care (Leave and Pay) Act 2023 represents a major advancement in supporting new parents in the UK, particularly those facing the challenges of neonatal care.

Having received royal assent on 24 May 2023, the Act introduces up to 12 weeks of Statutory Neonatal Pay and Leave. This entitles parents to 12 weeks of additional paid leave if their baby requires neonatal care, supplementing their existing parental leave entitlements.

This benefit is especially critical for parents during the first 28 days after their child’s birth, should they require specialised neonatal care. Designed to integrate smoothly with existing payroll processes, this statutory allowance aims to provide employees with seamless access to this support from day one of employment.

The Act applies across England, Scotland, and Wales, ensuring a unified approach to neonatal care support across the UK.