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Employment Rights Bill This is the big one. Employment rights reforms will have a huge impact on businesses, payroll departments and HR departments, and this bill contains a whole load of changes we’ll need to understand. At time of writing, we don’t have the bill in full to go through, but we do have the intentions laid out from the King’s Speech. Banning exploitative zero-hour contracts The government sees the use of zero- hours contracts as one-sided flexibility that sacrifices a worker’s right to predictability and job security. It wants to ensure all workers have the right to a contract which shows the true number of hours worked over a period and receive reasonable notice of any shift changes, with compensation given for cancelled or curtailed shifts. Banning zero-hour contracts has been a long-standing pledge of the Labour Party, but you may notice that the wording now states “exploitative”, which is a key difference when it comes to how this will work in the real world. Exactly what is meant by exploitative is still unclear so we’ll need to wait for further information in the actual bill, but this shows the government recognises there are some situations where the flexibility of such contracts is genuinely required. ‘Fire and rehire’ and ‘fire and replace’ We currently have a statutory code for the issues presented by fire and rehire practices. The King’s Speech briefing notes deem this “inadequate” and instead propose that remedies need to be placed in law to give workers more rights in cases where they feel the practice has been used against them. As with above, these laws will need to be mindful of where companies have a genuine need to restructure, while being hard on companies seeking to exploit workers. Day one right to parental leave, sick pay and protection from unfair dismissal New workers and employees are currently used to waiting to receive certain statutory rights, but this bill plans to remove that wait. Parental leave being a day one right will have an impact on treasury finances due to the ability to reclaim the funds; however, the same is not true for sick
in reducing the number of loss-making pots they need to administer. Other proposals include ensuring all members are saving into schemes that demonstrate value for money under the aptly named Value for Money framework. For the payroll professional, it’s less about what is in this bill and more about what’s missing from Labour Party communications altogether. A private members’ bill seeking to extend automatic enrolment to those 18 and over and remove the lower earnings threshold for qualifying earnings was given Royal Assent in September 2023. The timeline for its introduction is now up to the current government, but we’re expecting a public consultation to be published, so all stakeholders can have their say on how a rollout is completed. The government sees the use of zero-hours contracts as one- sided flexibility that sacrifices a worker’s right to predictability and job security Budget Responsibility Bill The Budget Responsibility Bill won’t have too much of an impact on your day to day lives, but it may stop future fiscal events from causing a catastrophe. Where measures being introduced by a government are “fiscally significant”, they will be required to make a request to the Office for Budget Responsibility to produce a full costings report assessing the impact of such changes. This should reduce the likelihood of repeating the infamous mini budget of 2022, which resulted in a small amount of panic from stock markets and the Bank of England stepping in with some measures to protect the Gilt and pensions markets. But it also resulted in significant policy changes and U-turns for those working in payroll, who were being pushed from pillar to post as a new chancellor stepped in to remedy the situation.
pay, for which employers cover the full cost. The CIPP has called for some form of small employers reclaim for sick pay as such policies could disproportionately impact small and micro businesses. For unfair dismissal, the current waiting time for the full rights to be inferred on an individual is two years. The government is committed to giving full protections from day one but needs to understand what can be done to ensure employers can use probationary periods to assess new hires. Remove the lower earnings limit and waiting period for statutory sick pay Back to sick pay, this proposal will make sick leave available to millions more low earners and give income protection as soon as the leave starts. As mentioned above, this is great for workers, but has the scope to cause some issues for small and micro businesses if government support in the form of a monetary reclaim is not given. Flexible working as a default Over the past couple of years, we’ve seen the steady improvement of flexible working processes as we adapt to a post-pandemic world. The government wants to go further and ensure that flexible working principles are considered as a genuine default which employers must accommodate wherever possible. Are your processes up to date? Single enforcement body, AKA Fair Work Agency We have been waiting on more information about a single enforcement body for the past couple of years, so the policy and research team is very excited to see some movement in this area. While we have very little information about this new Fair Work Agency, it should provide a space for employers to get assistance on compliance and for workers to get information on their rights regarding employment. Watch this space, as we will be! As and when the policy and research team gets hold of the draft legislation and fully understands it, we’ll be sure to let the payroll profession know. But for now, make sure you start thinking about the things discussed above and how they fit into your current processes. A lot of change is about to happen, but you have been given fair warning so use this time wisely. n
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| Professional in Payroll, Pensions and Reward |
Issue 103 | September 2024
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