The Employment Rights Bill promises landmark reform. Will lack of foresight let it down?

The Employment Rights Bill had its first reading in the House of Commons just over a year ago on 10 October 2024. Since then, Labour has moved quickly, with tight party discipline keeping their flagship manifesto pledge on track.

The urgency is understandable. Measures contained within the bill have the potential to increase protections for millions of working people. The Work Foundation has estimated that just two of the policies – a ban on zero-hours contracts and day-one rights to protection from unfair dismissal – would have enabled nearly four million more workers to access secure work in 2023 had they been in place.

However, while the bill is likely to receive royal assent in November, its implementation will be fiendishly complex. Employment law experts are already raising concerns about the lack of clarity on how the suggested changes will work in practice.

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Thanks to a phased rollout and provision for further consultation, the government has time to iron out the details, which will be set out in secondary legislation and regulations. But, with so many questions left unanswered, concern is growing that vulnerable groups will be excluded from protections.

Companies could ‘skirt around the rules’ without a ‘universal’ worker status

One of the most glaring problems has to do with how UK employment law defines employment status – a system experts say must change for the bill’s reforms to work. Currently, there are three main statuses: employees, who benefit from the broadest protections, workers, who may access only some, and the self-employed, who have almost no statutory protections at all.

The effectiveness of the Bill’s proposed reforms largely hinge on the government introducing a single ‘worker’ status. As Simon Deakin, Professor of Law at the University of Cambridge, told the House of Commons Public Bill Committee in November: “Many of the measures contained in the bill would not be effective, unfortunately, if this issue was not grappled with.”

Adis Sehic, Policy Manager at the Work Rights Centre, explains: ““Lots of rights depend on those different definitions of employment status. Unless this is harmonised, there’s a real risk of what some have coined ‘boundary manipulation’, where companies skirt around the rules by arranging a particular type of relationship with those who work for them.”

The government says it intends to “consult on moving towards a single status of worker”, but advancing the bill before addressing this issue feels like putting the cart before the horse.

We need effective enforcement of workers’ rights

Another key concern for those on the front line of defending workers’ rights is that those protected on paper may be let down by weak enforcement mechanisms. The bill promises to introduce a Fair Work Agency, consolidating the myriad agencies currently responsible for enforcing labour rights, including the national minimum wage, statutory sick pay, holiday pay and unpaid employment tribunal awards. But the enforcement picture is troubling on two fronts.

“I worry that there’s an over-reliance, both from government and from stakeholders, about what the Fair Work Agency can realistically achieve within its first few years of harmonising labour market enforcement bodies,” said Sehic. “Additionally, the government hasn’t yet presented a comprehensive plan to deal with the knock-on effect that extending rights will have on employment tribunals and enforcement capacity, and there’s no specific funding to deal with backlogs in the tribunals service.”

As reported recently in The Guardian, the employment tribunal backlog has soared, with a queue of 45,000 single open cases at the end of March. The government anticipates a 15% rise in claims as a result of the Employment Rights Bill, but it remains unclear how this increase will be tackled.

While there were rumours that tribunal fees might be reintroduced – which the TUC’s general secretary Paul Nowak warned would be “a gift for bad bosses” – justice secretary David Lammy has since ruled this out.

Even when workers are able to take employers to tribunal, many are still being denied remedy due to a lack of effective enforcement. “Unscrupulous directors are currently able to cheat workers by refusing to comply with tribunal orders or closing their companies anddeclaring insolvency to avoid paying debts, only to reopen them under a different name,” said Sehic.

It’s a significant issue. An investigation by the BBC and the Bureau of Investigative Journalism recently found that, of the 7,000 people who used the Employment Tribunal Penalty Enforcement and Naming Scheme, a government scheme set up to tackle employment tribunal non-payments, more than 5,000 did not receive their payment or settlement. It’s a stark reminder that rights without effective enforcement are often meaningless.

What is the road ahead?

After the final consideration of amendments takes place on 28 October, the Employment Rights Bill will receive royal assent and enter a prolonged consultation phase, with some key measures not expected until 2027. This extended timeline should allow for proper implementation planning, but the mountain of critical details left unresolved suggests the government may have underestimated the challenge.

Without a single worker status or adequate resources for an already overstretched enforcement framework, this historic upgrade to workers’ rights risks falling short of its full potential, leaving some of the most precarious workers behind.

Emma McClelland is a freelance writer based in Manchester. She writes predominantly about politics and social justice.

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