Employment Rights Bill: further Lords defeats signal continuing deadlock
Peers again backed substantial changes to the Bill in a series of decisive votes, setting up another return to the Commons and raising questions over the timetable for Royal Assent and beyond.
Developments in the Lords
The House of Lords considered the Commons’ latest position on the Employment Rights Bill on 17 November. Peers again supported a series of amendments on zero-hours contracts, seasonal work, unfair dismissal rights, political fund arrangements and industrial action thresholds.
The voting patterns were consistent across all divisions. Majorities were clear, none of the votes were close, and the Lords’ overall position remained unchanged from the previous stage. This underlines the extent of the continuing disagreement between the two Houses on several core elements of the Bill.
Peers reinstated the requirement for employers to write to zero-hours workers at the end of each reference period, giving them the opportunity to decline a guaranteed-hours offer rather than receiving one automatically. The Lords also maintained their preference for defining seasonal work within the legislation itself to ensure that future regulations take account of predictable fluctuations in labour demand.
The most significant divergence from the Commons’ approach continues to be in relation to unfair dismissal. The Lords again backed a framework that retains a qualifying period for ordinary unfair dismissal claims, rather than introducing day-one protection. They also supported an approach to trade union political funds requiring new members to make an active choice about contributing. In addition, peers reiterated their support for keeping the current 50 per cent turnout threshold for industrial action ballots.
Overall, the votes reflect a settled and coordinated view within the Lords that key aspects of the Bill, as currently drafted, raise concerns about their potential impact on employers, workforce planning and the wider labour market.
What happens next
Because the Lords have again insisted on amendments previously rejected by the Commons, the Bill must now return to the Commons for further consideration. Government Ministers can overturn each Lords amendment using their Commons majority, but the scale of Lords resistance places political pressure on Ministers to offer some movement if they want to bring the process to a close.
Another round of 'ping-pong' is therefore expected before any final version of the Bill can be agreed.
Timing of Royal Assent and implications for implementation
Royal Assent had originally been expected in early October, creating space for a series of consultations set out in the Government’s implementation roadmap for summer and autumn 2025. That timetable has already slipped. Consultations flagged for this period, including those on fire and re-hire, zero-hours contracts and the proposed approach to unfair dismissal and statutory probation periods, have not yet begun, and these remain key areas of disagreement between the two Houses.
Royal Assent before the Christmas recess remains technically possible, but the window is narrowing. Both Houses rise on 18 December and do not return until 5 January, leaving limited time for the Bill to complete its passage. With several substantial amendments still unresolved, further exchanges between the Commons and the Lords are likely. If these issues are not concluded in the coming weeks, Royal Assent may move into early 2026.
Any delay at this stage will compress an already tight implementation timetable. The Bill relies heavily on secondary legislation, accompanied by detailed consultation with employers, trade unions and regulators. Later Royal Assent would mean later publication of draft regulations, a tighter overall consultation schedule, and a likely phased commencement extending further into 2026 and 2027.
Practical impact on employers
For employers, the immediate challenge is the level of uncertainty around the final shape of the legislation. While some provisions, particularly those on zero-hours protections and unfair dismissal, may still change as the Bill completes its passage, there is still scope to prepare. Organisations can begin reviewing current workforce models, assessing where policies and contracts may require future adjustment, and identifying areas where new processes may be needed once the regulations are published. Early internal scoping of potential impacts will help ensure that employers can respond quickly and confidently when the final Act and accompanying consultations are released.
For more information or advice, please contact Jessica Scott-Dye.