Employment Rights Bill: key amendments and future consultations as Report stage nears conclusion

Latest developments in the Employment Rights Bill

The second and third sittings of the House of Lords Report Stage for the Employment Rights Bill (ERB) took place on 16 and 21 July 2025, ahead of the final sitting that was scheduled for 23 July. Several government amendments were agreed, including changes to the "fire and rehire" provisions and the establishment of national negotiating bodies for school support staff and adult social care workers. However, a number of significant non-government amendments were also agreed. These included:

• Blocking the government's proposal to introduce day-one unfair dismissal rights by retaining a six-month qualifying period of service for unfair dismissal.
• Requiring new regulations to strengthen protections for whistleblowers and place a duty on employers to investigate protected disclosures.
• Allowing employees to be accompanied to disciplinary or grievance hearings by a 'certified professional companion'. 
• Introducing a definition of "seasonal work" for use in future regulations under the ERB.
• Mandating government consultation with at least 500 SMEs on the impact of ERB provisions.

The Lords also approved amendments to prevent the newly proposed School Support Staff Negotiating Body from blocking employers' ability to offer improved employment terms, and to clarify that volunteering by under-16s on heritage railways does not constitute "employment in any industrial undertaking" under the Employment of Women, Young Persons, and Children 1920 Act.  

Consultations announced on unpaid internships, non-competes and AI

In addition to debating the ERB's contents, the government used the Lords sittings to signal a number of forthcoming consultations and evidence calls. A call for evidence on unpaid internships was launched on 17 July, and a full consultation on workplace support for parents of critically ill children is expected in 2026.

Further consultations are also planned on the future of non-compete clauses, AI in the workplace, and broader "Plan to Make Work Pay" proposals. These will include issues such as algorithmic bias, workplace surveillance, and employee consultation rights around the use of new technologies. The government also clarified its rationale for setting a 2% - 10% membership threshold for the Central Arbitration Committee (CAC) to accept a trade union application for statutory recognition, while confirming it will consult before finalising any changes.

Learning points for employers

Employers should be aware that the shape of the ERB is still evolving and that several amendments - particularly those relating to dismissal rights, whistleblowing, and disciplinary procedures - could significantly shift existing legal obligations. In view of the further non-government amendments agreed at the third sitting of the Lords, it appears likely that there will be a period of back and forth between the Houses as the ERB progresses towards Royal Assent.. We will continue monitor developments after the summer recess. 

For more information or advice, please contact Lucy Cinnamond in our Employment team.