Employment Rights Bill: key amendments and what they mean for employers
The Employment Rights Bill has undergone significant amendments, introducing new provisions and revising existing ones to enhance worker protections and clarify employer obligations.
Further reforms
The Bill continues to evolve, with recent Government-backed amendments following responses to consultations on zero-hours contracts for agency workers, collective redundancy remedies, trade union law, statutory sick pay, and the regulation of umbrella companies. We summarise below the key amendments that are most likely to become law.
Agency workers: guaranteed hours and shift rights
The Bill introduces a new framework for agency workers, ensuring they receive guaranteed hours and compensation for cancelled shifts. The responsibility for offering guaranteed hours will rest with the end hirer, except in specific cases to be set out in secondary legislation. Both the end hirer and agency will be responsible for providing reasonable notice of shifts, cancellations, and changes. Agencies must make payments to workers affected by short-notice cancellations but may recover these costs from hirers where the hirer was responsible.
Collective redundancy: increased penalties and further consultation
The maximum protective award for failure to comply with collective redundancy consultation requirements will double from 90 to 180 days' pay. The Government will also gather further views on strengthening collective redundancy rules and update the Code of Practice on Dismissal and Re-engagement to reflect the Bill’s provisions on ‘fire and rehire’. However, interim relief will not be made available for employees bringing protective award claims or unfair dismissal claims in a fire and rehire scenario.
Trade union relations: key reforms
Several amendments aim to 'modernise' industrial relations, including:
- Strengthening protections against ‘unfair practices’ during the statutory recognition process.
- Removing the ten-year ballot requirement for trade unions to maintain a political fund.
- Simplifying the information required in industrial action ballots and notices.
- Extending the validity of a trade union’s mandate for industrial action from six to twelve months.
- Providing digital access to workplaces for collective bargaining, in addition to physical access.
- The Government has also confirmed plans to consult further on e-balloting for industrial action.
Statutory sick pay (SSP): changes to eligibility and payments
The lower earnings limit for SSP eligibility will be removed, meaning all employees will be entitled to SSP regardless of earnings. However, employees earning below a certain threshold will receive the lower of 80% of their average weekly earnings or the statutory SSP rate.
Regulation of umbrella companies
A new amendment will allow umbrella companies to be regulated for employment rights purposes. Further consultation will determine how to ensure workers engaged through umbrella companies have comparable rights and protections to those directly engaged by employment businesses.
Requirement for secondary legislation
Many of these amendments will require further regulations to set out the details. The Government has confirmed that:
- Further details on agency worker protections will be implemented via secondary legislation. Regulations will specify exceptions where the agency, rather than the end hirer, is responsible for offering guaranteed hours. They will also clarify the requirements for reasonable notice of shifts, cancellations, and compensation for changes.
- Consultation will take place on the delivery of e-balloting for industrial action. While the Bill simplifies ballot notice requirements, the Government has committed to seeking further views on how e-balloting should be implemented.
- Further details on collective redundancy consultation requirements will be set out in regulations. The Government has confirmed that it intends to update the Code of Practice on Dismissal and Re-engagement to reflect the Bill’s provisions on fire and rehire. However, no specific consultation has been announced at this stage.
- Consultation will take place on regulating umbrella companies. The Government has tabled an amendment allowing umbrella companies to be regulated for employment rights purposes and has committed to further consultation on ensuring workers engaged through umbrella companies have comparable rights to those directly employed by employment businesses.
Key takeaways for employers
The proposed amendments, if enacted, will have wide-ranging implications for employers across all sectors. Employers with agency workers, trade union relationships, and collective redundancy obligations should monitor developments closely and prepare for policy changes once secondary legislation is introduced.
Bookmark our Employment Rights Bill tracker to keep up with the latest on the Bill. We will continue to report on developments.