(Bloomberg) -- Keir Starmer’s new UK government will unveil a package of new workers’ rights on Thursday as the prime minister seeks to balance the competing demands of his Labour Party’s union funders and business leaders whose approval he’s been courting for the past four years.
The content of the Employment Rights Bill has been subject to intense bartering between Labour, corporate leaders and the trade unions ever since the now deputy prime minister Angela Rayner first announced her “New Deal for Working People” back in 2021, when the party was in opposition. That’s led to disagreements that have spilled out into the open as union leaders objected to a perceived watering down of some measures, while businesses warned against new burdens on their operations.
Bloomberg spoke to several people familiar with the contents of the bill on what it will include. Based on those conversations, here’s what to expect — and what not to expect:
Zero-Hours Contracts
Rayner pledged to ban so-called zero hours contracts — which give workers no guaranteed hours — when she first announced her plans. She and Business Secretary Jonathan Reynolds have since watered down the plan, recognizing that some workers like the flexibility afforded by the contracts.
The bill will instead give workers the right to request a contract shaped around the hours they have regularly worked in a 12-week reference period. Some businesses had pushed for the reference period to be extended to six months.
Sick Pay
In perhaps the biggest changes of the package, the bill will introduce a raft of entitlements from day one of employment. That includes the right to statutory sick pay for all workers from the first day they are unwell. Currently, workers can only claim it from day four of being ill, while those earning less than £123 ($161) a week can’t claim it at all. The bill will offer a lower level of sick pay for the latter, to avoid incentivizing sick leave.
Parental Rights
The legislation will include a right to claim statutory maternity pay from day one in a job, rather than after six months; Paternity rights will also be strengthened.
Protection Against Unfair Dismissal
The right to protection from unfair dismissal from starting out in a job has been subject to much negotiation between businesses and trade unions. The bill will still permit probation periods, but in a significant change, they could be capped at six months rather than two years.
Right to Switch Off
Labour has watered down its ambitions to give employees a legal right to ignore work demands outside office hours, favoring softer rules that have been tried elsewhere, as Bloomberg first reported in August.
Rather than seeking to legislate for the so-called right to switch off, ministers instead will push for a code of practice for businesses. The government is modeling its approach on Belgium and Ireland, which have guidelines on out-of-hours communications, in contrast with France and Portugal, where the right to disconnect is enshrined in law.
Worker Surveillance
Labour’s original plans had committed to protecting workers from the use of surveillance technologies by their employers, but this will now be excluded from the legislation, as Bloomberg first reported last month.
Instead, the government is looking for other ways it could introduce measures around surveillance, for example via employment codes of practice. While Labour’s original plan — to use the law to restrict surveillance technologies such as Global Positioning System tracking, web-cams and click-monitoring — could work for office environments, it would cause problems for businesses such as courier services that need to track deliveries, a person familiar with the bill said.
Fire and Rehire
To the dismay of unions, Labour has modified one of its original proposals that workers’ groups held particularly dear — the ending of fire and rehire practices whereby companies fire workers and then re-hire them, often on lower pay or worse conditions.
Since that promise of an outright ban, the wording of Labour’s plans in this area has been modified to include a caveat that still allows employers to conduct restructures in exceptional circumstances.
Sharon Graham, general secretary of the trade union Unite, said the revised package “has more holes in it than Swiss cheese,” referring in particular to the caveats on fire and rehire. It still isn’t clear whether any measures relating to fire and rehire will be included in the legislation on Thursday.
Labour has already strengthened the code of practice on dismissal and re-engagement, giving employment tribunals the power to apply an uplift of 25% of an employee’s compensation if an employer is deemed to have unreasonably failed to comply with the code.
The bill’s publication on Thursday won’t bring the wrangling between trade unions and businesses to an end, however. Measures in the bill will be subject to consultation, with some not expected to be agreed and implemented until 2026.
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