The Employment Rights Bill has returned to the House of Commons, signalling a significant step toward the final decisions that will overhaul workers’ rights. The government has pledged to overturn amendments made by the House of Lords that would have diluted key protections.
What are the big changes to workers’ rights bill?
The legislation is set to affect around 15 million workers and includes several reforms:
Day One Rights: The bill proposes immediate rights to parental and bereavement leave, starting from the first day of employment. This is a significant change from earlier rules, which often needed a qualifying period.
End insecure work: The legislation will ban exploitative zero-hours contracts, aiming to provide greater stability for many of Britain’s most vulnerable workers.
Strengthen sick pay: It will extend statutory sick pay to up to 1.3 million of the lowest earners, ensuring they are not left without income during illness.
Abolish ‘fire and rehire’: The bill also looks to end the controversial practice of “fire and rehire,” which allows companies to dismiss staff and re-employ them on less favourable terms.
Prime Minister Keir Starmer hailed the bill as a “core part of our agenda to make people better off,” while Business and Trade Secretary Peter Kyle emphasised that “strong workers’ rights go hand in hand with a strong economy.”
Kyle, considered a “tech bro” by the media, is leading talks with White House officials about the US-UK technology partnership. While the business secretary is jetting off for tentative and delicate discussions with China about deeper economic cooperation, small business owners and the solo self-employed back home will be hoping that he pushes for simplified hiring and tax policies.
Bill’s impact on freelancers and fixed-term contractors
While the bill’s focus on employees with zero-hours contracts and traditional employment is clear, its impact on fixed-term contractors and freelancers is less direct.
For example, day-one rights for parental and bereavement leave could set a new standard for employment across the board. While many contractors run on a project-by-project basis and aren’t covered by these specific provisions, the broader shift towards more robust worker protections could influence future agreements and client expectations.
Independent freelancers may need to find a replacement while they take time off from work, even if just for two days.
Some freelancers, especially those on longer-term fixed contracts, may see an indirect benefit as the law sets a new baseline for what constitutes fair treatment. Yet again, many companies may not.
The government’s push to end “insecure work” and exploitative practices may also signal a wider cultural shift. This could lead to greater scrutiny of the contractual terms offered to independent professionals, pushing companies and freelancers alike to agree on more fair arrangements.
Sick pay and better retirement prospects for self-employed
While freelancers aren’t employees and don’t receive statutory sick pay, the general trend toward better protections could prompt some clients to consider more flexible or supportive contract terms to attract and keep top talent.
There is also a push from unions, like Bectu, which represent thousands of creative freelancers working in film and TV, to create a government-sponsored sick pay insurance opt-out option for the self-employed, according to a previous report by The Freelance Informer.
Financial advisers are also pushing for more government support to enhance existing financial products to better serve the self-employed in retirement.
According to reports on the new Employment Rights Bill, “exploitative zero-hours contracts” are not defined by a single term. Instead, the bill aims to address the exploitative aspects of these contracts by giving workers new rights.
Zero-hours contracts: what’s changing?
The legislation does not outright ban zero-hours contracts. Instead, it creates a new set of protections intended to give workers more security and prevent employers from using these contracts to unfairly shift all the financial risk onto their employees.
Here are some of the measures that will make zero-hours contracts less exploitative:
Guaranteed hours: Employers will be required to offer a guaranteed-hours contract to workers who have regularly worked more than their contracted hours over a 12-week period. This new contract will reflect the hours they actually work.
Reasonable notice for shifts: The bill introduces a right to “reasonable notice” for shifts. This will give workers more certainty about when they will work.
Payment for cancelled shifts: Workers will be entitled to a payment if their shifts are cancelled or cut short without sufficient notice. This provides a financial safeguard against last-minute changes.
The government stated:
The Bill’s return to the Commons follows extensive engagement with business and trade unions to ensure that the legislation is firmly pro-business and pro-worker, and that businesses have the certainty they need to plan for the future. This will continue as the Bill progresses through Parliament.