The new Labour government made a commitment in its manifesto to enhance the rights of workers, and some significant changes have already passed into law with the Employment Rights Bill which came into effect on 10 October 2024. Further measures are likely to enter the statute books soon. If you’re a business owner, these changes could have far-reaching implications for you, so you should take the time to read up on them and ensure your business is compliant.
In this blog, we’ve summarised five of the changes which could affect business bookkeeping.
A ban on zero hours contracts except in extreme circumstances
Zero hours, or casual contracts, mean that workers are not guaranteed to be given a certain amount of work from their employer, but they don’t need to work when asked. According to 2024 statistics from Statista, the sectors in which zero hours contracts are most likely to be used are accommodation and food, transport, the arts, health and social work and education.
The new law states that business owners will be required to offer any zero-hours workers a contract with guaranteed hours, based on a typical twelve-week period of work. If an employee wants to continue with a zero hours contract, they may, but they will have the option to switch over at any stage in the future if they change their minds. For a small business, losing this flexibility, for example during seasonal work, could be expensive and would need to be factored into cash flow predictions.
Flexible working rights
Flexible working is defined as working in a way which ‘suits an employers’ needs’ and can include accommodations such as adjustable times for starting and finishing, perhaps to fit in with school drop off or pick up, flexible lunch hours, or the option to work from home. It has now become the default option for all workers, with employers required to grant flexible working requests to employees from the first day of employment. However, employers can refuse this application if there is a sound commercial reason, and these reasons include:
- The burden of extra costs to implement it
- A detrimental impact on the quality of service or product
- The inability to recruit additional staff to cover this or to re-organise work amongst existing staff
- A detrimental impact on the ability to meet customer demand sufficiently
Unpaid parental and bereavement leave
This has become a right for workers from the very first day of their employment, whereas previously they were only entitled to it once they had been with an organisation for a year. Anyone legally classed as an employee has the right to take time off in the event of the death of a dependent. A dependent could be any of the following:
- Wife
- Husband
- Civil partner or partner
- Child
- Parent
- Anyone living in their household, excluding lodgers, tenants and employees
- Someone who relies on them for care such as an elderly grandparent or neighbour
Unfair dismissal protection
The Bill ensures that workers will receive considerably enhanced statutory rights from the very first day of their employment, and one of the main ones is that the two-year qualifying period for an employee to bring an unfair dismissal claim against their employer has been removed, enabling all employees to have a right to protection from day one. In an attempt to strike a balance, the Bill introduces a proposed nine-month statutory probation period for new employees. Business owners, particularly those with small businesses and not much cash flow leeway, will need to take even greater care to ensure a new hire is a good fit, and conduct proper assessments on their suitability.
Strengthening statutory sick pay
The qualifying period for SSP has been removed, meaning that instead of having to have three days of illness before you are entitled to it, an employee can claim from the first day of illness. In addition, if employees earned less than £123 a week, they were ineligible for SSP previously. However, now it is extended to all employees regardless of remuneration. SSP is £116.75 per week if someone is too ill to work, and this is paid by the employer for a maximum of 28 weeks.
Running a business, ensuring you are compliant with all the new legislation and keeping up with the bookkeeping means quite a few plates to keep spinning. Why not ease your workload by contracting out your bookkeeping? At AMR Bookkeeping Solutions, our expert team keeps rigorously on top of our clients’ diverse bookkeeping and payroll requirements, whatever the changes in employment law. Why not complete our contact us form or call 01892 559480.
