The immediate parliamentary standoff over Labour's flagship employment rights bill has eased, but the legislation's passage will merely open the door to a new series of detailed and potentially contentious negotiations.
Business Pressure Eases Lords' Blockade
Pressure from six major business groups has improved the chances of the Employment Rights Bill receiving royal assent by Christmas. In a significant intervention on Monday, the employer bodies published a letter urging the House of Lords, where Conservative peers and cross-benchers had staged a revolt, to stop blocking the legislation and allow it to proceed.
The employers remain opposed to the bill's removal of the cap on compensation for unfair dismissal claims, which triggered the recent rebellion. However, their greater fear was that further delays would jeopardise a hard-won concession from last month. This saw the government perform a U-turn on granting protection from unfair dismissal from day one of employment, securing instead a six-month qualifying period with the Trades Union Congress's support, as both sides sought to expedite the bill's progress.
While the Lords retains the power to amend the bill further, the prevailing political mood now suggests that doing so would be seen as seriously out of touch with the desire to see the legislation enacted.
The Real Fight Begins in Secondary Legislation
Royal assent will not, however, mark the end of lobbying or the start of a simple implementation phase. In a highly unusual feature of this bill, many of its most critical operational details have been deliberately postponed, to be resolved through secondary legislation at a later date. This means the arguments are merely on pause.
A prime example is the introduction of guaranteed hours contracts, designed to tackle the abuse of zero-hours contracts. The primary legislation establishes the right but leaves fundamental questions unanswered for secondary rules to define. These include: the threshold for classifying a "low hours worker" (which could be anywhere from eight to thirty hours a week), the definition of "regular work," and the length of the reference period used to determine entitlement.
Employers warn of unintended consequences, such as being disincentivised from offering extra casual hours to existing staff. Unions, meanwhile, caution against the creation of loopholes through ambiguous wording. The core issue is that the framework law passes the thorniest practical problems down the line.
Future Battlegrounds for Employers and Unions
Beyond guaranteed hours, the employer groups' list of outstanding "concerns" slated for secondary legislation is extensive. It includes the compensation system for unfair dismissal tribunals, rules affecting seasonal and temporary workers, thresholds for lawful industrial action, and the practical application of new union regulations. Each of these areas represents a potential mini-battle in the coming months.
Business Secretary Peter Kyle, welcoming the employers' letter, has pledged to maintain a "spirit of consensus and cooperation." He emphasised the government's commitment to "extensive consultation" on the detailed implementation and secondary legislation. While this is a constructive message while parliamentary ping-pong continues, "extensive" consultations are likely to be lengthy, ensuring the process will drag on well beyond the bill's formal passage.
Some may argue this is a sensible way to improve industrial relations—by establishing high-level principles in parliament before thrashing out on-the-ground details. Yet it also appears that the government, in its rush to meet a manifesto pledge to legislate within 100 days of taking office, has kicked numerous complex details into the long grass. The real and proper arguments over the substance of Britain's new workers' rights framework are only just beginning.
