Staff 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

R1: Employment law is reserved

More than seven million people will gain rights to claim sick pay, ­maternity pay and protection against unfair ­dismissal from their first day in the job under sweeping new laws.
Labour will announce what it calls a “once-in-a-generation” overhaul of workers’ rights on Thursday in an ­attempt to give people greater security.

After talks with business leaders, ministers have offered concessions on key aspects of the reforms, including abandoning a statutory “right to switch off”.

The publication of the Employment Rights Bill will set out the first half of Labour’s reforms to workers’ rights, kicking off an intense debate about the details of changes amid consultations on implementing the measures.

One of the central changes will be a universal entitlement to sick pay for all workers from the first day they are ill. At present, people are not entitled to sick pay until the fourth day of their illness, with those who earn less than £123 a week unable to claim at all.

The reforms will give new rights to 7.4 million workers reliant on sick pay, plus a million who earn below the limit.

But after businesses lobbied against a “perverse incentive” to take time off work, they appear to have convinced ministers to set a lower rate of sick pay for those who earn below the threshold, in a concession that will anger unions.

Small businesses’ hopes for a government fund to compensate them for the cost of more sick pay appear likely to be dashed, however.

Women will be entitled to apply for maternity pay from their first day in the job, rather than waiting six months, and be given better protections against dismissal when they return, while more ­fathers will get rights to paternity pay.

Probation periods, which can last two years at present, will be shortened to six months and staff will get protection against unfair dismissal from their first day on the job.

Bosses will retain the power to sack unsatisfactory workers during probation periods without a full performance management process, as long as they provide a letter setting out their reasoning.

Ministers have also pulled back from plans to give staff a formal “right to switch off”.
They have rejected the ­approach used abroad, where companies are legally forced to draw up a code of conduct setting out when bosses are not allowed to contact staff. Instead, ministers will encourage companies to draw up such codes under guidance rather than statutory requirements.

There is a risk that the plans lead to a backlash from businesses and unions alike, with business groups raising ­concerns about the burden and cost of the new rights and unions saying they have not gone far enough. Ministers hope that detailed negotiations on the small print will allow them to satisfy both sides. ­

Labour’s self-imposed deadline of a draft law within 100 days of taking office means that the precise rules will be ­decided through secondary ­legislation.

Further elements of Labour’s plans, such as creating a single status of “worker” to crack down on bogus ­self-employment and an overhaul of employment tribunals to help staff challenge unfair treatment, have been put back until later in the parliament.
Anna Leach, chief economist at the Institute of Directors, said: “The potential for this to be positive is that by further weeding out ‘unfair’ employment practices, the overall quality of jobs in the economy rises, unfair competition is reduced, and potentially more people rejoin the labour market, helping with the UK’s activity problem.

“But there’s the risk of using a sledgehammer to crack a nut and simply making it more costly to hire, and reducing employment opportunities.”

Paul Nowak, general secretary of the TUC, said: “The Employment Rights Bill, if delivered in full, will make work better for millions of working people … Treating staff well boosts productivity and living standards.”

The laws will become Labour’s ­biggest reforms since taking office and will lead to further Tory claims of “French-style” labour laws. They come after public sector workers including doctors and teachers were handed above-inflation pay rises totalling £9.4 billion.

A government source argued: “Our plan to make work pay has always been about delivering economic growth by increasing security for working people, improving productivity and levelling the playing field for businesses. Ensuring people have sick pay when they need it is crucial to that mission.”