Britain outlines details of closely watched workers' rights plan

LONDON (Reuters) - Britain's Labour government set out its plans for a sweeping package of new workers' rights on Thursday including plans to end fire-and-rehire practices and strengthening sick pay in the biggest change to employment law in a generation.

The contents of the Employment Rights Bill have been debated for months and will be closely watched by trade unions, who traditionally fund the governing Labour Party, and business leaders, who are concerned about some of the changes.

In the bill that will be laid before parliament on Thursday, the government will propose a raft of protections for millions of workers such as granting new rights on parental leave, sick pay from day one of employment, and banning zero-hours contracts, which give workers no guaranteed hours.

But some of the key details of the new bill are still to be worked out, and the government appeared to back away from some pre-election promises such as giving employees a legal right to ignore work demands outside office hours and simplifying their employment status.

Instead, the government said it would consult on employees' right to ignore work outside of normal hours and introducing a single status of worker to end the practice where some staff are labelled self-employed, which allows companies to save on costs such as social security payments.

The new law will be Prime Minister Keir Starmer's biggest reform since winning a landslide election victory in July. The government framed the plans as the best way to avoid widespread industrial action that has disrupted services over the last two years.

"The best employers know that employees are more productive when they are happy at work," the business minister Jonathan Reynolds said in a statement.

"This upgrade to our laws will ensure they are fit for modern life, raise living standards and provide opportunity and security for businesses, workers and communities."

Last month Reynolds, who has been a key figure in repairing Labour's damaged relationship with the business community, sought to give reassurance that day one rights for workers would not remove the ability for employers to use probation periods for new workers.

The government said the exact length of probation periods will also be subject to consultation.

(Reporting by Andrew MacAskill and Alistair Smout; Editing by Alexandra Hudson)