Government to create Fair Work Agency in new Employment Rights Bill

The government plans to create a new ‘single authority’ agency to enforce workers’ rights.

The establishment of a new Fair Work Agency that will bring together different government enforcement bodies is one of the 28 reforms announced today in the government’s promised Employment Rights Bill set to upend and challenge long-standing practices in the British workplace.

The ‘single authority’ agency – designed as a “stronger, recognisable single organisation” to enforce workers’ rights such as holiday pay, strengthen statutory sick pay and support employers looking for guidance on how to comply with the law – has been long sought after by business organisations to manage the various strands of employment issues.

The bill comes within 100 days of the new government’s election to office and aims to “show the benefits of a ‘pro-business, pro-worker’ approach”. It also comes ahead of the International Investment Summit when the UK could hope to attract new investment.

Under other measures in the Employment Rights Bill, the existing two-year qualifying period for protections from unfair dismissal will be removed, to ensure that all workers have a right to these protections from day one on the job.

The government will also consult on a new statutory probation period for companies’ new hires. This will allow for a proper assessment of an employee’s suitability to a role as well as reassuring employees that they have rights from day one, enabling businesses to take chances on hires while giving more people confidence to re-enter the job market or change careers, improving their living standards.

The reforms include provisions on zero-hours contracts, ‘fire and rehire practices’ and establishing day one rights for paternity, parental and bereavement leave for millions of workers. Statutory sick pay will also be affected in the bill, removing the lower earnings limit for all workers and cutting out the waiting period before sick pay kicks in.

Flexible working will be made the default where practical. Large employers will also be required to create action plans on addressing gender pay gaps and supporting employees through the menopause, and protections against dismissal will be strengthened for pregnant women and new mothers. “This is all with the intention of keeping people in work for longer, reducing recruitment costs for employers by increasing staff retention and helping the economy grow,” the government statement announcing the reforms said.

“Getting the labour market moving again is essential to economic growth with one in five UK businesses with more than 10 employees reporting staff shortages,” the government said. “Flexibility, for workers and businesses alike, is key to answering this challenge and is at the heart of the legislation to upgrade the law to ensure it is fit for modern life and a modern economy.”

Business secretary Jonathan Reynolds said: “It is our mission to get the economy moving and create the long-term, sustainable growth that people and businesses across the country need. Our plan will give the world of work a much needed upgrade, boosting pay and productivity.

“The best employers know that employees are more productive when they are happy at work. That is why it’s vital to give employers the flexibility they need to grow while ending unscrupulous and unfair practices.

“This upgrade to our laws will ensure they are fit for modern life, raise living standards and provide opportunity and security for businesses, workers and communities across the country.

“Alongside the legislation, a ‘Next Steps’ document for the Make Work Pay Plan has been published, outlining the government’s vision and long-term plans and setting out our ambitions for the plan to grow the economy, raise living standards across the country and create opportunities for all.”

It also repeals the anti-union legislation put in place by the previous administration, including the Minimum Service Levels (Strikes) Act legislation.

The full Employments Rights Bill document can be accessed here.

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