Employment Rights Bill amendments: what you need to know
After the Employment Rights Bill was introduced to Parliament in October 2024, the government held four consultations to gather feedback on certain aspects of it. It has now published the consultation responses and has made numerous amendments to the Bill which have been approved by House of Commons.
Here are the key changes to note:
Collective consultation protective award
Currently, employers proposing 20 or more redundancies ‘at one establishment’ within a period of 90 days or less, must collectively consult with a recognised union or employee representatives before making anyone redundant. If employers don't comply with their collective consultation obligations, employees can claim a protective award of up to 90 days' pay.
The government consulted on its proposal to increase the maximum protective award. It considered two options:
- Increasing the length of the award from 90 to 180 days; or
- Removing the cap entirely and give tribunals the power to award an amount it deems appropriate to reflect the severity of the breach
The government has decided to go with the first option and they have updated the Bill to that effect.
The government has abandoned its plans to extend interim relief to employees seeking a protective award which would have enabled tribunals to order an employer to either rehire the employee or keep paying their salary and benefits until the final hearing.
Changes to triggers for collective consultation
The original draft of the Bill removed the words ‘at one establishment’ which meant that employers would have needed to count any proposed redundancies across all their sites or premises to work out if they need to collectively consult.
The government has decided to retain the words ‘at one establishment’ but has introduced a second threshold which will also trigger the duty to collectively consult. It hasn't yet defined this but it looks as though it will be based on either a percentage of the workforce who are expected to be made redundant or a set number of redundancies over more than one establishment. The government has said that whatever approach it adopts, the minimum number of employees affected won't be lower than 20.
The impact of this amendment will depend on how the government defines the ‘threshold number of employees’ but the policy objective is clear: it will require more employers to comply with collective consultation than is currently the case.
Sickness
Currently, statutory sick pay (SSP) is payable from day four of sickness, and workers need to earn above the lower earnings limit of £123 to qualify.
The Bill provides that SSP will be paid from the first day of illness and the lower earnings limit will be removed. Following the government's consultation, the Bill now states that the rate of SSP will be either the flat rate (currently £116.75) or 80% of the employee's normal weekly earnings, whichever is lower.
Zero-hour rights to extend to agency workers
The Bill introduces new rules for employers of zero-hours contracts and workers with low guaranteed hours (not yet defined), requiring them to:
- Provide a guaranteed number of hours after each reference period (likely to be 12 weeks) based on the hours they have worked
- Give reasonable notice (to be defined) of available shifts and any changes to shifts they've agreed to work
- Compensate staff for short notice shift changes
The government has updated the Bill to apply these provisions to agency workers because it was concerned that excluding them would give employers a way to evade these new obligations.
Temporary agency workers usually have contracts of engagement with their employment agency but work under the direction of end hirers. Consequently, the government has introduced additional provisions to deal with liability. The obligation to offer guaranteed hours will lie with the end hirer, subject to future secondary legislation that could place obligations on agencies in certain scenarios. The end hirer and agency must give agency workers reasonable notice of shifts, cancellations, and changes.
The agency will primarily be responsible for payments due to short-notice cancellations, or curtailment, given that the worker will already be on the agency's payroll. But the agency will be able to negotiate commercial terms to recoup costs from the end hirer when they are responsible. However, the government acknowledged that either party might be responsible, in practice, for changing shifts at short notice etc so they want to ensure a tribunal can appropriately apportion liability based on responsibility of each party.
Additionally, amendments to the Bill include new measures allowing workers to bring employment tribunal claims against employers who deliberately manipulate workers' hours to evade their obligations to offer guaranteed hours.
The one piece of good news is that employers and trade unions will be able to mutually agree, through a collective agreement, not to adhere to these new provisions and to agree other terms to deal with the same situations.
The government will consult on the overall implementation of these measures at a later stage. Also, recognising that some work is genuinely temporary so it would be inappropriate to mandate permanent contracts for such roles, they will also consult further before defining what constitutes a temporary need.
Trade unions and strikes
In addition to the provisions already included in the Bill concerning trade unions and strikes which you can read about here, the government has added additional clauses to the Bill including:
- Enhancing the process and transparency of trade union recognition by streamlining the recognition process and strengthening protections against unfair practices. For example, the Code of Practice on unfair practices during recognition and derecognition ballots will apply throughout the entire recognition process, starting from when the Central Arbitration Committee (CAC) accepts the union's application for statutory recognition
- Extending union access provisions to include digital access and establishing a fast-track process for securing access agreements, with appropriate penalties for non-compliance
- Abolishing the 10-year requirement for unions to ballot their members on the maintenance of a political fund
- Simplifying the current information requirements on industrial action ballots and notice to employers and also ensuring that trade unions provide a 10-day notice period for industrial action
- Introducing e-balloting
- Extending the expiry of the mandate for industrial action from 6 to 12 months
And that's not all…
In addition to the amendments arising from government consultations, the government has also made other changes:
Protection from discrimination after returning from maternity and other family related leave
In redundancy situations, pregnant women, those on maternity leave, and those returning to work from maternity leave (within 18 months from the expected week of childbirth) have the right to be offered a suitable alternative vacancy over others provisionally selected for redundancy. Similar rules apply to new parents returning from adoption or shared parental leave.
The original draft of the Bill allowed for regulations to protect women from dismissal for reasons other than redundancy (not defined) for a period of time after they return to work from maternity leave, except in limited circumstances (also not yet defined). This additional protection also extends to employees on other types of family-related leave.
We still don't know the circumstances in which this new right will apply. But, the government has said that it will publish supplementary regulations to include procedures for employees and employers, and consequences of non-compliance.
Labour market enforcement
The most important potential change relates to enforcement.
The government has included new clauses to the Bill empowering the Secretary of State (through the Fair Work Agency) to issue a ‘notice of underpayment’ to an employer that hasn't paid a member of staff money they are legally entitled to. It will be limited to certain types of money claims including sick pay and holiday pay. Employers will have 28 days to pay the amount and may also also have to pay a penalty of 200% of the specified sum, capped at £20,000 per individual and a minimum of £100.
The Agency will be able to issue notices to recover underpayments going back up to six years (depending on the nature of the claim) but it won't get involved if the employee has already issued proceedings against their employer to recover the money.
More significantly, the Bill also now includes provision allowing the Secretary of State (again via the Agency) to bring any claim that an individual worker can bring in an employment tribunal - apart from those where it could issue a notice of underpayment. It will also have the power to provide, or arrange for the provision of, legal assistance to any person who is a party to civil proceedings in England, Wales or Scotland relating to employment or trade union law or the law of labour relations.
We don't have any detail about this but it will require a huge injection of cash to work. That's definitely one to watch.
Bereavement leave for pregnancy loss
During debate in the House of Commons, the government recognised that women who miscarry before 24 weeks and their partners need protecting and is considering extending bereavement leave to cover this.
Holiday and holiday pay
The Working Time Regulations 1998 will be amended to place a new obligation on employers to keep ‘adequate’ records to show they have complied with their obligations to provide statutory holiday and holiday pay to their workers. These records must be kept for six years from the date on which they are made.
Stay tuned for more amendments!
The Bill has now moved to the House of Lords where it has had its first reading. The second reading, set for 27 March 2025, will involve further debate and potential amendments.
You can read more about the original draft of the Employment Rights Bill ('the Bill') here. and read about an amendment to allow employees six months to bring claims in an Employment Tribunal here.
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