A new enforcement agency strengthened to protect sweeping changes to the rights at work of millions of Britons will target fraudulent employers, the outline of which will be published on Friday. It will be outlined in a 'watershed' bill.
The Fair Work Agency will be created as part of the government's Employment Rights Act, which will include stronger protections against unfair dismissal and exploitative contracts.
Executives will have inspection powers and will be able to impose new penalties on those who violate employee rights, such as holiday pay and minimum wage. Whistleblowers will be encouraged to report bad behavior to the new organization.
Its powers will not be limited to new rights, but will also enforce a wide range of existing rights, including the national minimum wage and certain aspects of the Modern Slavery Act.
Deputy Prime Minister Angela Reiner told the Guardian the bill was a “watershed moment” and the “biggest overhaul of workers' rights in generations”.
“This is a government of workers, for workers, and our purpose is very clear: to pay for work,” Rayner said.
Implementation of the new institutions will take time and will be subject to consultation, with the earliest the new rights could come into force being autumn 2026.
The new employment rights bill was promised to be passed within 100 days, but in the run-up to its publication, bitter arguments continued between ministers, trade unions and businesses. A last-minute concession was made to extend the legal probationary period for business leaders.
The government had previously suggested it would recommend six months, but will now aim for nine months. Prime Minister Rachel Reeves was thought to support a longer trial period of up to 12 months.
But despite the last-minute nature of the deal, trade unions have widely reported the change, with the TUC calling it a “tectonic shift”. But small businesses say the reforms are being rushed to meet arbitrary deadlines, creating confusion.
The government claims that the scope of the reforms is vast. 9 million people will get new rights to fight against unfair dismissal, more than 1 million low-wage workers working zero hours will be entitled to job security in new contracts, and 30,000 more parents will get new rights to fight against unfair dismissal. will gain a new right to parental leave, and 1.5 million people will gain a new right to unpaid parental leave.
Ministers also believe the bill will allow at least 1.7 million people out of work due to family commitments to enter the labor market and benefit from new policies on flexible working and parental leave. .
“This landmark bill will reverse decades of insecurity and low wages while increasing productivity, creating growth, and improving living standards,” Rayner said.
“In the biggest overhaul of workers' rights in a generation, Labor will today put fair pay and safe work back at the heart of the economy, driving productivity and growth.”
The bill would eliminate the two-year eligibility period that employees currently have to work before filing a lawsuit for wrongful termination, making that right available from day one. However, as a concession to companies, for the first time there will also be a legally mandated trial period, allowing employees to be fired “lightheartedly'' due to poor performance.
Government officials emphasize that lawsuits for wrongful dismissal are still possible during this period if the employer has acted wrongly.
The bill includes 28 major reforms, including eliminating zero-hour contracts and prohibiting layoff and rehire practices, except at the request of certain employees, but it also prevents companies from effectively going into permanent bankruptcy. There are some exceptions in cases where the person is exposed to serious risks.
New rights will be granted to receive sick pay from the first day of illness, and the minimum income limit for sick pay will be removed. Employees have paternity rights and unpaid parental leave from day one.
The bill would require employers to adopt flexible working as a default for their employees, but employers could object on certain practical grounds. Large employers will also be required to develop action plans to address the gender pay gap and support post-menopausal employees. Protection against dismissal will be strengthened for pregnant women and women returning from maternity leave.
The bill would also repeal anti-union laws enacted by the previous government, including the Minimum Service Level (Strike) Act, which was never enforced.
However, many of the measures included in Labour's manifesto and original workers' rights pledges have failed to bear fruit. Most important is the commitment to legislate a single status for workers to eliminate the gray area between employee and self-employed status.
Government officials said this would require a longer period of consultation and could not be done within the 100-day deadline, but insisted it was still a promise.
Other commitments are also likely to be watered down, taking the form of codes of conduct such as a “right to switch off” that prevents employees from being contacted after hours, except in emergencies. A review of the parental leave system is also promised.
Unions have widely welcomed most of the changes, despite some anger over the summer over redundancy and rehire carve-outs, zero-hour contracts and the slow implementation. . TUC general secretary Paul Nowak said: “The time has come to write a positive new chapter for workers in this country.”
“Shifting the balance to give workers greater rights is long overdue,” said Christina McAnear, president of Unison, the largest trade union. For too long, workers have had to endure poor wages, intolerable working conditions, and discrimination.”
Ministers have been at pains to stress that the new law will involve long-term consultation with businesses, who have been sounding the alarm for years about the risks of the proposals on growth and the job market.
Tina McKenzie, policy chair for the Federation of Small Businesses, said: “This bill is a rush job, clumsy, chaotic and poorly planned. It introduces 28 new measures for small business employers. “Imposing it all at once will make it confusing for small and medium-sized employers to understand everything.” . Other than warm words, there is a lack of real growth drivers, and economic inactivity will only increase further. ”
Commerce Secretary Jonathan Reynolds, who will introduce the bill, said it would be good for businesses and workers. “Good employers know that employees are more productive when they are satisfied with their jobs, which is why they give them the flexibility they need to grow while eradicating unscrupulous and unfair practices. It is important to give to employers,” he said.
