Employment Rights Act 2025
What recent progress his Department has made on implementing the Employment Rights Act 2025.
The Employment Rights Act 2025 is bringing employment rights into the 21st century, with phased implementation to give businesses and workers, including those in Cumbernauld and Kirkintilloch, time to get ready and understand their new rights at work. We have already repealed burdensome trade union legislation, strengthened statutory sick pay, introduced day one paternity leave rights and launched the Fair Work Agency. We continue to consult on measures such as zero hours contracts and non disclosure agreements to get the details right. Further changes will happen in October, including trade union reform and better protection from sexual harassment.
I draw attention to my entry in the Register of Members’ Financial Interests as co chair of the Unison group of Labour MPs. For too long, many workers have been expected to keep themselves available for work without any certainty over the hours or income that they would receive. The right to guaranteed hours was designed to change that. As those provisions are implemented, what practical difference does the Minister expect they will make to working people across the country?
Through the right to guaranteed hours, we are tackling one sided flexibility. Qualifying workers are offered contracts that better reflect their hours, and they can then plan their lives and finances. Over 1.2 million people work on a zero hours contract, and research published by the Living Wage Foundation in 2022 found that 87% of zero hours workers said that they want more hours in their contract. My hon. Friend will understand the terrible consequences and the impact that not knowing their regular hours or how much they will earn that month can have on people’s lives, including the severe impacts of not being able to feed their kids or know whether they can pay their bills. We are working to get the details right and to get businesses, workers and trade unions to engage in our recent consultation so that we can achieve both flexibility and security.
The Government’s impact assessment puts the costs of the Employment Rights Act at up to £5 billion, which will hit small and medium sized businesses since they lack the human resources teams and the expertise to absorb the additional burdens. What advice does the Minister give to small and medium sized businesses in my Mid Leicestershire constituency on how they should deal with that?
The hon. Member might not have read the updated impact assessment, which significantly lowered that amount, following the passing of the Employment Rights Act towards the end of last year, to £1 billion. On supporting small and medium sized enterprises, we want to work closely with them because many across the country are already doing lots of the things that are in the Employment Rights Act. They also understand that treating their workers fairly benefits their business and makes the economy grow. I am grateful to the small and medium sized businesses that I have worked with and which fed directly into the details of the Act. I want to work closely with them to understand the impacts and where we can get this right, and to work on the details. I thank them for their engagement, and I look forward to continuing to work with them.
I call the shadow Secretary of State.
Today, we Conservatives have launched a campaign to save the summer job. Employment rights do not help young people if they cannot get a first experience of work, and they are trapped in a Catch-22 situation of needing experience to get work but not being able to get any during their education years. Young people say it, businesses say it and Alan Milburn, the former Labour Minister, says it. Will the Government now back our plans to save the summer job, cut employment red tape, support seasonal working and lower taxes?
The Opposition’s suggestion of getting 13-year olds to work later hours on a Sunday is simply not serious. What is serious is the review that we have conducted with Alan Milburn on how we can get more young people into employment. We recognise the challenge, and that is why it is an important priority for us. We inherited a situation in which nearly a million young people were not in employment, education or training. That increased by 250,000 before the general election, and the Conservatives did absolutely nothing about it. Young people written off by a legacy of rising youth inactivity and declining apprenticeship jobs. That is why we are serious about this. I appreciate and welcome Alan Milburn’s review, which is detailing how we can improve the situation. He has looked at the challenges that we are facing and laid bare the scale of them. We have already taken action to help young people by bringing forward the biggest youth employment reforms to create 500,000 opportunities for young people through our £2.5 billion youth guarantee, and we will continue to do more.
I call the Liberal Democrat spokesperson.
Research by the British Retail Consortium found that over two thirds of part time workers in the retail sector took the role because they needed flexibility around educational and caring commitments. The number of young people not in employment, education or training is over 1 million. Liberal Democrats repeatedly warned that Labour’s jobs tax would hammer job opportunities for young people and that its business rates hikes would kill off opportunities on the high street, which gives so many young people their first job. As they implement the Employment Rights Act, which will introduce some welcome measures for employees, how will the Government ensure that this is not yet another burden that prevents businesses from being able to provide entry level and flexible jobs?
I am glad that the Liberal Democrat spokesperson welcomes parts of the legislation, but I wish she would not repeat lines from the Conservatives, who broke our economy and destroyed our labour market. That is why the Act is so important: it will fix problems, particularly the problem of people being in insecure work, which does not grow our economy and will not provide the stability that we need.
I thank the hon. Lady for mentioning flexibility. The problem occurs when flexibility is one sided and workers bear all the financial risks. That is why, as part of our consultations, particularly on zero hours contracts, we want to get flexibility and security right, so that we can rebalance them. We are working closely with employers, including in the retail sector, to understand how best to get that balance right, so that it benefits workers and businesses, too.