What will labours new employment law revisions mean for your business?

When Labour was appointed earlier this year, they promised to push through their new Employment Rights Bill within the first 100 days, which means it should be announced before October 12th.

While I believe revisions have been needed for some time to address key issues such as the gender pay gap, sick pay, and other ongoing concerns, the one that seems to top Labour’s agenda is making employment rights effective from day one of employment. Currently, these rights do not come into effect until after two years.

So, what will this mean for businesses in the UK?

While I agree that this issue needed addressing, and bringing it down to one year would have been a reasonable step—where most conscientious employers would have had sufficient time to assess whether a new hire had settled into their role—this change will mean employment rights apply from day one.

This is likely to result in employers being much more cautious when hiring. Recruiters and talent professionals will need to be far more precise in their selections, as there will be less room to focus solely on a candidate’s potential, aptitude, or attitude. Employers may be less inclined to ‘trial’ potential hires to see if their instincts are correct, which could lead to a less flexible approach to hiring. Additionally, there may be an increase in claims from individuals who feel they were unfairly dismissed, regardless of their performance.

It’s interesting that this topic has been creating shockwaves among employers, but in reality, if companies adopt a data-driven approach and manage employees effectively, it should make little difference.

Managing employees can be time-consuming for any business owner. However, having the right processes, performance indicators, and targets in place, as well as a solid management structure to oversee performance, will allow most new hires to thrive. Those who don’t will be lawfully exited from the business without falling foul of the new regulations.

Yes, this change will be inconvenient, and I don’t diminish the challenges it will bring. The biggest issue will be maintaining employer confidence and determining how to overcome this hurdle. However, the reality is that businesses can prepare for this change by focusing on onboarding, coaching, and managing—things we should already be doing.

If you’d like help with this, feel free to drop me an email, and we can discuss further.

I'm Richard Pucci, Over 20 years in leadership in the recruitment industry specialising in Strategy, Operations and People.

rich@talentbusinessconsulting.com