Employees to get more rights from first day of work

Labour’s ‘once-in-a-generation’ reform will affect sick pay, maternity pay and rules around unfair dismissal. The government has said it will publish the draft Employment Rights Bill within 100 days of coming into power, and this is widely expected to be on Thursday this week (10 October).

Reports have suggested the bill will include measures such as a better deal for new parents, day-one protection against unfair dismissal and statutory sick pay from the first day of illness.

Rights from day one

A cornerstone of the reform is the extension of key employment rights from day one of employment, removing the previously required qualifying periods. These changes include:

• Sick Pay from day one – Labour is expected to introduce statutory sick pay eligibility from day one of employment, removing the current minimum earnings threshold. This would ensure that all employees, including part-time and low-paid workers, are covered if they fall ill. However, a report in The Times has suggested Labour could introduce a lower statutory sick pay for those who earn below the current threshold to qualify of £123 a week.
• Immediate maternity and paternity pay – the reforms would eliminate qualifying periods for maternity and paternity pay, meaning new parents would be entitled to these benefits from the start of their employment.

Unfair dismissal protection

The reform also addresses unfair dismissal laws. Under the new regulations, employees are protected from unfair dismissal from day one, as opposed to after two years of service under the previous rules. This shift would grant workers immediate protection, ensuring dismissals are handled fairly, with proper procedures in place, regardless of the employee’s length of service.

For employers, this presents a significant challenge, as dismissals must be carefully managed from the start of any employment relationship. The importance of robust HR processes, fair disciplinary procedures, and clear documentation is more critical than ever to avoid potential legal disputes.

Business response and concessions

Despite initial concerns from business leaders about the operational and financial impact of the reforms, Labour has engaged in dialogue with the business community and made concessions on certain aspects of the legislation. Notably, the proposed statutory “right to switch off” from work-related communications outside of working hours is expected to be postponed until later in parliament following feedback from employers, who argued it could hinder workplace flexibility.

Employment tribunal implications

Labour’s reforms are expected to lead to an increase in employment tribunal cases as workers become more empowered to challenge unfair treatment. Recent tribunal decisions demonstrate the potential costs to employers of failing to follow proper procedures.

For example, in Cowie v Vesuvius plc, a senior executive was awarded £3.2 million after being subjected to age discrimination and unfair dismissal. The tribunal ruled that the company’s reliance on discriminatory remarks, such as calling the executive an “old fossil,” contributed to his dismissal​.

This case highlights the high stakes for employers under the new laws, where claims of unfair dismissal or discrimination could result in significant financial penalties.

Other recent cases, such as Malabver-Goulbourne v Arbor Academy Trust, which saw a headteacher awarded over £102,000 for unfair dismissal, further underline the importance of careful handling of disciplinary issues and dismissals​.

Labour’s once-in-a-generation reform promises to drastically reshape employment law in the UK. By expanding workers’ rights and protections from day one, these proposals aim to create a fairer and more secure environment for employees. However, businesses will need to be proactive in adapting to these changes, it is more important than ever to review and strengthen your HR practices to safeguard against costly tribunal claims and ensure a fair, compliant workplace.

It is important to note that these reforms are currently part of a bill, which must be debated and voted on in Parliament before becoming law. The legislative process may lead to further amendments, businesses should remain attentive to any changes that could affect implementation timelines or specific provisions.