NAA Member News: Brabners – New rights, new risks: what the Employment Rights Bill means for automotive employers
Hailed as one of the biggest upgrades to workers’ rights in a generation, the Employment Rights Bill is currently passing through its final stages in parliament. Christine Hart, legal director at Brabners discusses what this means for automotive employers and how they can gear up for the changes.
Employers have been aware of the Bill’s proposals since it was announced in last year, but while some protections will be phased in, its passage confirms that employers should accelerate preparations now.
For automotive employers, the challenges posed by the Bill stand apart from those in other sectors. These changes also arrive amid a wider landscape shift, with businesses contending with the EV transition, digitalisation and upskilling workforces in the wake of AI advances.
Working challenges
The automotive sector has a distinctive workforce profile that means it will be uniquely affected. For instance, the sector’s high reliance on the agency staff that make up its just-in-time supply chains means that the Bill could have a ripple effect across operations. In practice, the legislation is likely to mean higher costs to secure staff, less workforce flexibility and even the possibility of supply chain disruption.
In particular, a new right to guaranteed hours could have considerable impact. Employers will have to be acutely aware of new measures that effectively ban zero-hour contracts, instead necessitating them to offer the option of guaranteed part-time or full-time contracts to staff at regular intervals – a new burden for HR teams to manage.
The Bill also introduces reasonable notice for shift changes and compensation for cancelled shifts. Given that the automotive industry relies heavily on shift-based work – often with variable hours to match production cycles – this significantly reduces operational flexibility. For just-in-time manufacturing models, employers may need to redesign shift system and invest in workforce planning tools to avoid penalties.
What’s more, for mid-tier and tier-two/tier-three suppliers, tight margins and working capital strains are likely to make compliance more difficult. Without the financial headroom of their larger counterparts, some might face challenges in updating onboarding, training and HR systems. While a pinch point in the short term, this ultimately underlines the need to invest in workforce planning.
Addressing the skills divide
The Bill also accelerates the need for more rigorous recruitment processes and stronger management of employees who are demonstrating subpar performance. Currently employees do not gain unfair dismissal rights until they have been employed for two years, giving employers plenty of time to assess whether an employee is a good fit. The Bill intends to reduce this period significantly, introducing protection from unfair dismissal from day one, subject to a new statutory probation period, underlining the need to hire the right people from the outset.
The shift will place greater emphasis on recruitment processes, with employers needing to be confident that new hires have both the skills and adaptability required for a fast-changing sector. Equally, managers will need to be trained to address performance issues early on, taking a more structured and proactive approach to feedback and intervention. These changes will need to be reflected in contracts and policies.
At the same time, the Bill intersects with existing challenges around skills and workforce demographics. Many plants and dealerships rely on older workers, and employers already face difficulties upskilling them to service ADAS and EV technology. While upskilling is necessary across all strata of a business, even without legislative pressures, the Bill risks widening the gulf between older employees and younger employees more attuned to using new technologies.
Trade Union dynamics
Another feature of the Bill that employers should be aware of is the change in Trade Union recognition, which has the potential to alter how businesses operate.
In short, easier recognition processes will give unions greater leverage and allow them to gain recognition more quickly and exert greater influence. While the automotive sector is already heavily unionised, existing flashpoints around pay, shifts and the EV transition are likely to come to the fore.
Employers should review their union engagement strategies and ensure line managers are trained for a more assertive union environment. Now is also the time to get ahead of workforce concerns and ensure problems are addressed early and decisively before they are escalated.
Getting prepared
Many of the details of the Bill have been known since its initial announcement in autumn 2024, meaning employers have had some time to prepare. However, the Bill’s imminent passage means now is the moment to put final safeguards in place, with HR strategies tested against the latest draft of the legislation.
Practicable steps include auditing employment contracts, especially for agency and zero-hours staff, and reviewing existing dismissal, redundancy and family leave policies – checking where they fall short against impending legislation.
It will also be necessary to update HR and payroll systems to track day-one rights, parental leave entitlements and fair pay obligations. Less immediate but equally important, businesses should invest now in training across all age groups, to address the ongoing skill gaps in the automotive industry.
Beyond the Bill
The Bill is still passing through its final stages, and more detail will become available as the planned implementation consultation process progresses.
While it’s sensible to implement safeguards for the Bill now, particularly for legislation such as day-one rights for family leave and sick pay, it’s paramount that management teams keep their ear to the ground to monitor how the Bill’s measures evolve in practice.
While many industry employers may be facing a daunting period of change, the Bill can also be seen as an opportunity. This balance was a key focus in Brabners’ recent Employment Rights Bill webinar, where we discussed how HR teams and people leaders can successfully implement the necessary changes.
Find out more about how you can best prepare, here: https://register.gotowebinar.com/recording/1733124345207920981
