Employment Rights Bill to spark workforce reorganisations and an era of uncertainty for self-employed

The recently introduced Employment Rights Bill promises significant changes to the UK’s staffing environment, but for the self-employed, the path forward remains shrouded in uncertainty

While the bill aims to bolster worker protections and regulate atypical employment arrangements, the long lead time for implementation and lack of specific provisions for the self-employed leave many questions unanswered.

Key changes on the horizon (eventually):

Law firm Osborne Clarke confirms there is still no “solution” to the eternal challenge of how to define self-employment. “As widely predicted that issue has been kicked down the road for now,” the law firm stated in a report.

Recruitment firms that cater to employers in sectors with larger numbers of low-paid workers will need to prepare– for example, retail, construction, healthcare, logistics, manufacturing, etc. – where rights to predictable hours, the removal of age-related National Minimum Wage (NMW) rates and changes such as “day one” rights, will provide a benefit to workers not currently costed and provided for by the employer.

In the short term, these changes will result in workforce reorganisations as employers attempt to control these anticipated employment costs and reconcile the wage bill for their businesses before these measures come into force. 

Osborne Clarke Workforce Solutions Team

Delayed unfair dismissal rights: While the bill introduces day-one unfair dismissal rights for employees, this provision notably excludes traditional agency workers engaged under contracts for services. This distinction leaves a significant portion of the self-employed workforce without enhanced protection against unfair dismissal.

Zero-hours contracts in the crosshairs: The bill’s focus on regulating zero-hours contracts could indirectly impact the self-employed by altering the terrain of available work arrangements. Platforms and staffing companies heavily reliant on such contracts will face pressure to offer more stable, guaranteed-hours positions, potentially leading to a shift in the types of engagements offered to freelancers and independent contractors.

Enforcement agency in the works: The creation of a new enforcement agency signals a stronger commitment to protecting worker rights. However, the agency’s specific mandate and how it will address the unique challenges faced by the self-employed remain to be seen.

A long road ahead:

With a consultation period planned throughout 2025 and most reforms not expected to take effect before 2026, the self-employed are left in a state of limbo. The lack of immediate changes and the absence of clear provisions specifically addressing their concerns contribute to a sense of uncertainty about the future.

Allison Kirkby, Chief Executive, BT Group, said of the new Bill:

BT Group believes that a strong economy is one that works for everyone, and has already adopted many of the measures that will be covered by this legislation.  It will be crucial to get the details right, to avoid unintended consequences and keep the UK competitive, and we welcome the constructive, consultative approach that the Government is taking.

BT to axe up to 55,000 jobs by 2030 as it pushes into AI | BT | The Guardian

What should the self-employed do to prepare?

• Remain vigilant: Stay informed about the bill’s progress and engage with updates from relevant government bodies and industry associations.
• Advocate for clarity: Utilize the consultation period to voice your concerns and advocate for greater clarity on how the bill will impact the self-employed.
• Seek expert advice: Consult with legal and financial professionals to understand your current rights and how the proposed changes may affect your business and working arrangements.

As Osborne Clarke notes in a report:

Platforms, staffing companies and other users of zero-hours arrangements face a significant challenge in terms of having to offer regular workers guaranteed hours.

This statement underscores the potential for widespread changes in worker status and recruitment. However, for the self-employed, the bill’s impact remains ambiguous. It is crucial to stay informed, actively participate in consultations, and seek professional guidance to navigate this period of uncertainty and ensure your interests are represented.