UK Government confirms key dates in Employment Rights Bill roadmap

Under the new ‘day one rights’ is the right to receive occupational sick pay from day one of sickness, which is a step change from the previous three day wait period before entitlement begins. Whilst this is welcome news for employees, for employers this may require investment in better systems for tracking absence and processes to feed the data instruction into the payroll software. This is one example of the impact of these changes that can be very complex to achieve in real time.

Whilst the employment law changes will drive the legal contractual and policy changes required, this all flows into the employment tax implications and again, in turn, this impacts how payroll processing must be managed.

The Government has promised time to prepare, but that time starts now. To stay ahead, employers should:

• Review and update policies, contracts, systems and processes, identifying gaps and prepare their own roadmap for change;
• Engage with consultations as they arise to ensure impacts on their business are outlined to help shape the future phases of changes;
• Plan for compliance and cultural shifts, especially in areas under the Fair Work Agency’s remit and relating to unions/collective employee engagement, ensuring processes are compliant, robust and cost effective;
• Advance key changes (e.g. restructures, system updates, contract revisions); and
• Act early to reduce risk and gain competitive advantage.

This is a cross-functional challenge: legal, finance, HR, tax, payroll, IT and compliance must align. A joined-up approach is essential. The time to act is now and whilst you digest the details below and await further guidance, please get in touch to discuss how best to begin preparing.

The latest changes will include the repeal of 2016 restrictions on industrial action, making strikes easier, and also greater protection from unfair dismissal for those involved in strike action.

• Doubling of maximum awards for collective consultation failures;
• Statutory Sick Pay from day one (no Lower Earnings Limit);
• Day-one rights for paternity and unpaid parental leave;
• Simplified trade union recognition and balloting;
• Launch of the Fair Work Agency with expanded enforcement powers; and
• Stronger whistleblower protections.

Many of the changes above will impact the cost of your employee headcount for the business and also bring into context additional HR and payroll procedures in order to track, process and review, for example, the additional rights to paid time off.

• Ban on fire and rehire practices;
• New rules on handling tips;
• Duty to inform workers of their right to join a union;
• Enhanced union access and protections for reps;
• New duty to prevent sexual harassment—including by third parties;
• Extended employment tribunal time limits; and
• Increased protections for those taking industrial action.

These changes will also require more robust policies to be in place within your business and strong governance to ensure that you are following and compliant with the changes in legislation.

Further consultations are expected this year on:

• Dismissal protections;
• Pay negotiations in schools and social care;
• Umbrella company regulation;
• Bereavement leave;
• Gender pay gap action plans;
• Collective redundancy consultation; and
• Full ban on zero-hours contracts (from 2027).

We encourage you to get involved and respond to the consultations that you feel will impact your organisation the most.

Please get in touch with the authors, Clare Tomlinson, Tom Williams or your usual KPMG in the UK contact to talk through how we can help you and support your legal and tax compliance.

For further information please contact:

• Eloise Knapton
• Donna Sharp