Recent changes in UK labor law mark a significant development for businesses employing fixed-term contract workers. With the introduction of the Employment Rights Bill in October 2024, fixed-term workers are now set to receive full employment rights, aligning their treatment with that of permanent employees. These legislative updates aim to promote fairness and job security across all contract types, reinforcing the UK government’s commitment to improving working conditions.
While the bill is still making its way through Parliament, and the exact commencement date of these provisions remains to be confirmed, it is expected that the changes will take effect in 2025. This article explores the key provisions of the bill and how Employer of Record (EOR) services can help companies navigate the changes.
Key Changes for Fixed-Term Contract Workers
Under the Fixed-term Employees (Prevention of Less Favorable Treatment) Regulations 2002, fixed-term workers already had some protections. However, the new Employment Rights Bill goes further, ensuring that fixed-term contract workers now have access to the following rights:
- Equal Pay and Benefits: Fixed-term workers are now entitled to the same pay, pension contributions, bonuses, and other benefits as permanent employees for the duration of their contracts.
- Redundancy Rights: In the event of redundancy, fixed-term workers will receive the same redundancy pay as permanent employees, provided they meet the eligibility criteria.
- Right to Permanent Employment: If a fixed-term worker has been employed for four consecutive years, they must be offered a permanent position, unless there is a justifiable reason for continuing with a fixed-term arrangement.
- Increased Job Security: Employers must inform fixed-term workers of any permanent vacancies within the company, ensuring equal opportunity for career progression.
- Sick Pay and Leave Rights from Day One: The bill also strengthens sick pay, parental leave, and other leave entitlements, granting fixed-term workers the same rights as permanent employees from their first day of work
The UK’s new Employment Rights Bill introduces important protections for fixed-term contract workers, ensuring that they receive the same rights as permanent employees. While the bill will not take effect until 2025, businesses must begin preparing now to adjust their workforce policies and manage the increased administrative demands.
Employer of Record companies, like Quadlux, offer a practical solution to these challenges, providing expertise in legal compliance, payroll management, and contract administration. By partnering with an EOR, businesses can ensure they remain compliant with the new legislation while optimizing their workforce management strategies. For more information, please refer to Welcome to GOV.UK
