UK's new Labour government sets out overhaul of workers' rights

London: Britain's new Labour government unveiled Thursday a slew of new rights for workers, including more generous rules for sick pay and parental leave and major restrictions on certain precarious employment practices such as zero-hour contracts and fire and rehire. The move was described by ministers as the biggest overhaul of workers' rights for a generation. The Employment Rights Bill was published around 100 days after Labour took power for the first time in 14 years following its crushing victory over the Conservative Party in the general election.

The 28 measures have been broadly welcomed by unions and lobby groups representing businesses, though one described it as “clumsy, chaotic and poorly planned.” Business Secretary Jonathan Reynolds said the bill, which will come into effect in 2026 after more consultations with businesses and unions, will raise the minimum floor of employment rights and provide better support for those businesses that are engaged in good practices. “This is a comprehensive bill which, once implemented, will represent the biggest upgrade in employment rights for a generation," he said.

The government, under Prime Minister Keir Starmer, has struggled to maintain the initiative since it was elected on July 4, with critics accusing it of weeks of drift and negative headlines over a series of gifts. With lawmakers back in Parliament, Starmer will be hoping his government can get back on track in the coming weeks with a raft of policies, most notably in the budget on October 30. Among the measures announced is that workers will be able to claim sick pay from the first day of absence rather than the fourth, and will also allow them to be entitled to paternity leave and unpaid parental leave from day one of employment, as well as a statutory entitlement to bereavement leave. Workers will also have day-one protection against unfair dismissal. The bill will also increase the likelihood of a request for flexible working arrangements to be granted and require large employers to produce action plans on how to address gender pay gaps and support employees through menopause, as well as strengthening rights for pregnant workers and new mothers.

Unions have welcomed the measure, as a “seismic shift” from the low-pay, low-productivity economy they accused the previous Conservative government of presiding over. “Whether it's tackling the scourge of zero-hours contracts and fire and rehire, improving access to sick pay and parental leave, or clamping down on exploitation, this bill highlights Labour's commitment to upgrade rights and protections for millions," said Paul Nowak, general secretary of the Trades Union Congress. The Confederation of British Industry, the UK's biggest business lobby group, also praised the government for engaging with businesses in addition to unions and expressed its desire that the cooperation can continue before the measures come into effect in two years. “With a number of critical details still subject to consultation, it's important the government builds on the good engagement to date to ensure we get the detail right on this decisive piece of legislation," CBI CEO Rain Newton-Smith said. The Federation of Small Businesses was less positive arguing that the legislation is a “rushed job, clumsy, chaotic and poorly planned” and that dropping 28 new measures onto small business employers all at once leaves them "scrambling to make sense of it all.”