The UK government has made important changes to employment laws through the new Employment Rights Bill. These changes are designed to protect workers' rights and will affect how payroll is managed. Here are the key updates that payroll departments should be aware of:
1. Statutory Sick Pay (SSP)
Employees can now claim SSP from the first day they are off sick. This change removes the previous rules where employees had to meet a minimum earnings threshold or wait a few days before being eligible for SSP.
2. Unfair Dismissal
Employees can now claim unfair dismissal from the first day of employment, instead of having to work for two years before being eligible. However, there will likely be a new probation period (around nine months) where dismissal can happen more easily.
3. Parental and Bereavement Leave
Employees now have the right to take parental, paternity, or bereavement leave from their first day of employment. Previously, they had to wait before becoming eligible for these types of leave.
4. Ban on Fire and Rehire
Employers can no longer dismiss employees for refusing changes to their contract. This prevents companies from using the "fire and rehire" tactic to take away agreed benefits from employees.
5. Guaranteed Hours for Zero-Hours Contracts
Employers must now offer regular hours to workers on zero-hours contracts, based on the hours they’ve worked in the past. This change is aimed at giving more stability to workers with unpredictable hours.
6. Gender Pay Gap and Menopause Support
Large employers (with 250 or more employees) must create plans to reduce the gender pay gap. They also need to provide support for employees going through menopause.
These updates will require employers to adjust their payroll processes to comply with the new laws.
The bill is expected to come into effect around October 2026. Employers will need to revise their employee contracts, recruitment procedures, internal policies, and probationary periods to comply with the new legislation.
Stay tuned for more updates as the Employment Rights Bill progresses through Parliament
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