Government publishes amendments to Employment Rights Bill

Posted: 17/03/2025

March is proving to be a busy month for those with an interest in employment law. This month saw the government publish five responses to consultations on various aspects of the Employment Law Bill, before putting forward some 200 pages of amendments to the bill, which has its third reading in the House of Commons this week.

The responses, and the amendments, are wide-ranging and generally reflect the proposals set out in the original bill. This has been greeted with dismay by many business leaders who had been hoping for a watering-down of some of Labour’s proposals. There are, however, some notable departures from the original bill. The key developments are set out below.

Collective redundancy consultation and fire and rehire

One of the most significant changes proposed by the new amendments, and one of the few which will be welcomed by employers, is in respect of collective consultation. Employers are currently required to enter into a process of collective consultation where they propose to make 20 or more redundancies ‘at one establishment’ within a period of 90 days. 

Under the original proposals, the concept of ‘establishment’ was to be removed, meaning that all redundancies across the employer’s business would be counted. Now, collective consultation will be required if there are 20 or more redundancies at one establishment, or, where redundancies are being made across the employer as a whole, if a different threshold is reached. This threshold is not confirmed, but the secretary of state will have the power to make regulations prescribing the number – possibly a fixed number (greater than 20) or a percentage of the workforce.

Another new proposal is to increase the maximum protective award for failure to collectively consult, from 90 to 180 days’ pay. This could significantly increase the costs of non-compliance and is intended to deter employers from deliberately ignoring the rules, or from ‘buying out’ employees’ collective consultation rights.

While the government will press ahead with increased restrictions on the practice of ‘fire and rehire’, the proposal that interim relief should be available as a remedy to employees affected by unlawful fire and rehire practices has been dropped.

Unfair dismissal

The new amendments do not affect one of the headline measures in the draft bill – making unfair dismissal a ‘day one’ right. This right will be subject to a statutory probationary period, and further details of this are still awaited.

Agency workers

In a new development, the new rights for those on zero-hour contracts to guaranteed hours and to reasonable notice of shifts will be extended to agency workers. The latest amendments also include the possibility of excluding these rights (for both workers and agency workers) via a collective agreement.

Statutory sick pay (SSP)

As well as removing the four-day qualifying period for SSP, the new amendments will grant access to this benefit to all employees, including the lowest earners. Those earning below the lower earnings limit will be entitled to sick pay at 80% of their average weekly earnings.

Miscarriage bereavement leave

Mothers and their partners will be entitled to two weeks’ bereavement leave if they suffer a pregnancy loss before 24 weeks. This extends the current law which applies where a child dies or is stillborn after 24 weeks.

Industrial relations

The government is proposing a radical overhaul of the industrial relations framework, which includes a simplification of the recognition process, and of ballot and strike notices, and the right for unions to access the workplace digitally. The industrial relations group has prepared an in-depth briefing on the consultation response, which can be found here.

Fair Work Agency

A new enforcement agency, the Fair Work Agency (FWA), will consolidate existing enforcement bodies, and have a significantly enhanced remit. In addition to existing enforcement function including in relation to National Minimum Wage, SSP and holiday pay, the FWA will be responsible for enforcing the new duty on employers to keep holiday records for six years. 

Perhaps most significantly, the FWA will have the power to bring an Employment Tribunal claim in the place of a worker, if the worker decides not to pursue the claim. It is unclear how this would work in practice if the worker is not available to give evidence, but this proposal could add even more pressure to an already creaking tribunal system.

Umbrella companies

The government has confirmed that it will take forward the previous government’s proposals to regulate the use of umbrella companies by bringing them within the scope of the same rules as employment businesses. This is likely to significantly reduce the use of umbrella companies.

Right to disconnect

This proposal, which would introduce similar rights to ‘switch off’ for British workers as those enjoyed by workers in other jurisdictions, including the Republic of Ireland, has not been added to the bill. It is reported that the proposal has been dropped.

Next steps

With the amendments having been debated in Parliament, an updated version of the bill is expected imminently. Many aspects of the bill will be subject to further consultation, and require secondary legislation to bring them into effect, and we will not see significant change until 2026. 

We will continue to monitor the progress of the bill carefully, and issue further updates on the key developments. For further information on the Employment Rights Bill and how it might affect your organisation, please contact Paul Mander.

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