How proposed new employment rights might better align with the unique needs of the membership sector.
The UK Labour Government has introduced substantial amendments to employment law through its Employment Rights Bill, to enhance workers' rights, improve conditions, and clarify employment classifications. Although these reforms aim to safeguard workers, membership organisations must thoughtfully evaluate how these changes fit with their specific requirements and operational frameworks.
The Main Headlines of The Employment Rights Bill Unpacked
Day-one rights - Workers gain unfair dismissal protection from day one, benefiting 9 million people. Previously, two years of employment were needed to qualify. Day-one rights extend to paternity and unpaid parental leave, while maternity leave already has this status. A comprehensive review of all parental-leave rights is included. An additional 30,000 fathers or partners qualify for paternity leave, and 1.5 million parents gain unpaid parental leave from day one. Employers must also establish bereavement leave policies.
Sick pay - Employees are entitled to sick pay from the first day of illness, rather than day four. Statutory sick pay is £116.75 weekly for up to 28 weeks if earning at least £123 weekly. The government plans to remove the lower earnings limit for all workers.
Probation - The government will consult on a statutory probation period for new hires. The proposed nine-month limit, extended after business input, caused trade union concern as they preferred six months.
Zero-hours contracts - Over 1 million people on zero-hours contracts can get guaranteed hours if desired. Workers on low-hours contracts can also request guaranteed hours after 12 weeks, or choose to stay on zero-hours contracts.
Fire and rehire - Fire and rehire practices are banned except in extreme cases, preventing employers from rehiring on worse terms. Carve-outs are allowed, which unions oppose. Businesses facing collapse can change terms if necessary.
Flexible working - Flexible working becomes the default where practical, with plans to address gender pay gaps and support women through menopause. There are stronger protections against dismissal during pregnancy and post-maternity leave.
Enforcement - The Fair Work Agency will enforce rights like holiday pay, combining existing bodies. Its remit will be clarified after consultations.
Minimum wage - The Low Pay Commission's remit will consider living costs in setting minimum wage and remove age bands for younger staff, raising pay for many young workers.
While being broadly welcomed, along with a government focus on growth, there are signs that the way the proposed changes could be implemented is starting to cause consternation across the whole of the UK business sector.
Neil Carberry, Chief Executive of the Recruitment & Employment Confederation (REC), said:
“Electing a new government with economic growth as major priority should be good news for businesses and there is some evidence of an improving trend in employer sentiment. But some of the challenges ahead that were widely discussed in August will also be weighing on employers’ minds. Boosting confidence to invest and create jobs – and removing barriers to doing so – should be a priority for the new government as Parliament returns.
“A strong industrial strategy, with the workforce and productivity at its heart, and a pragmatic approach to implementing employment rights reforms will go a long way to boosting business confidence this autumn.”
Guidance on Adaptation for the Membership Sector: How We Can Assist
At Membership Bespoke, we are in frequent conversations with Hiring Managers, Heads of Departments, Senior Leaders, HR, Operations, and Talent Acquisition professionals across the membership sector and so we have a unique perspective on how the new regulations could be better adapted to suit them manage their teams - from SMEs to international, multi-officed Professional Bodies.
Rather than simply adopting the reforms, membership organisations are ideally suited to explore ways to shape and adapt these changes to better suit the sector's circumstances.
We look at how the membership sector could be impacted by the employment reforms, and how organisations might seek to adopt these changes for the benefit of their workforce, their members, and their financial sustainability.
The Membership Sector’s Priorities: Flexibility and Fairness
Membership organisations, whether they be Trade Associations, Regulatory Bodies or Professional Bodies, often rely on a combination of permanent staff, freelance contractors, and temporary workers to manage many facets of their organisation. One of the key advantages many of these organisations offer is flexibility, both to their workforce and to their members.
The proposed changes—such as eliminating zero-hour contracts, introducing a “single worker status,” and expanding workers' rights - are intended to create fairness and stability for workers - these changes could restrict the flexibility that is vital to the membership sector.
As a sector built on collaboration and community support, membership organisations tend to be leaders in offering strong working conditions. Still, they may face challenges if reforms are implemented without considering their specific needs, particularly in managing costs and maintaining flexibility. The sector as a whole would benefit from engaging with policymakers to ensure these reforms align with their operational realities.
Single Worker Status: A Call for Nuance in Classifications
The UK Government’s plan to reduce the employment categories from three (employee, worker, self-employed) to two, with a “single worker status,” has been left out of the Bill, but this is expected to be included at a later date with a longer review and consultation period. It could lead to many temporary and freelance workers being reclassified as employees. While this move provides benefits like holiday pay and sick leave, it could also introduce associated costs and reduce the ability of membership organisations to offer flexible, ad-hoc work.
Membership organisations often engage workers for additional support including research projects, or short-term activities. Flexibility in hiring freelancers and contractors allows them to keep costs down while scaling their workforce during peak periods.
1. Adaptation Request: The membership sector could benefit from a more nuanced approach to worker classifications here for example. For instance, a new "project worker" category might allow for enhanced rights without the full suite of employee benefits. This could protect both the flexibility that workers value and the operational efficiency that organisations need.
Temporary Workers: Preserving Flexibility
Many membership organisations rely on temporary workers, particularly for running events, conferences, admin and short-term projects. The proposed reforms, particularly the effective elimination of zero-hour contracts, would require these workers to be provided with more stable hours and predictable work patterns.
However, in practice, membership organisations often don’t have a consistent, planned stream of work to offer such employees. Their needs fluctuate with needs and member demands, and as such, rigid working patterns may not suit either party.
2. Adaptation Request: Instead of a blanket removal of zero-hour contracts, membership organisations may propose a revised version that includes greater protections for workers without eliminating the flexibility that is essential for temporary staffing in event-heavy industries. A specific carve-out for sectors with cyclical work patterns, like events, could allow organisations to continue using temporary staff without being burdened by impractical requirements for regular hours.
Right to Disconnect: Managing Expectations in a Member-Driven Sector
The proposed “right to disconnect,” allowing workers to switch off outside of work hours, aligns well with promoting work-life balance. This is expected to follow the initial Employment Rights Bill, along with a raft of 30 other measures.
Membership organisations often operate in environments where member queries and crises can arise outside traditional office hours. With many organisations serving their members globally or across different time zones, workers may need to respond to urgent situations outside typical working hours.
3. Adaptation Request: Membership organisations might advocate for flexibility within the “right to disconnect” rule, such as exemptions for roles or situations where urgent out-of-hours work is essential. Workers in these roles could be compensated accordingly or offered time in lieu for their efforts, allowing both worker protection and organisational efficiency.
Pay Gap Reporting: Ensuring Feasibility for Smaller Organisations
The expectation for pay gap reporting based on ethnicity and disability will be coming in a separate Bill and remains a key consideration for Senior Leaders, Hiring Managers and HR alike. While important for transparency and equality, could create an administrative burden for smaller membership organisations. Many operate with limited HR infrastructure and may struggle to manage the reporting requirements without significant cost increases.
4. Adaptation Request: Membership organisations could propose adjustments based on the size of the workforce. For example, pay gap reporting could apply to organisations with fewer than 250 employees only after a specific threshold has been met, allowing smaller entities more time to prepare. Alternatively, there could be simpler reporting mechanisms tailored to smaller organisations.
Family-Friendly Rights and Employment Tribunal Extensions: Tailored Support
The proposals to extend family-friendly rights and employment tribunal claims will undoubtedly improve worker protections. Membership organisations, which tend to already prioritise employee well-being, are unlikely to object to these changes. However, for smaller organisations, the potential for increased claims or additional costs related to maternity rights and tribunal cases could pose a challenge.
5. Adaptation Request: The sector could seek to work with the government on creating a tiered system, where smaller organisations receive additional support, such as tax breaks or government subsidies, to cover the costs of extended family-friendly provisions or legal fees associated with employment tribunals.
Preparing for the Future: Collaboration is Key
The membership sector is well-positioned to thrive under new employment regulations if it can help shape the details. By working closely with the UK government, membership organisations by their very nature, can advocate for policies that protect workers while also ensuring that their operational needs are met.
Conclusion
Membership organisations should seize the opportunity to engage with policymakers now to ensure that the proposed reforms bolster the sector, enabling it to maintain its commitment to serving members and supporting its workforce.