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Latest government amendments to the Employment Rights Bill – what employers need to know

6 Mar 2025 11 min read

This week sees an important step forward in the progress of the Employment Rights Bill through Parliament, as the government published its proposed amendments to the Bill, alongside its responses to the various consultations issued towards the end of last year.

For a full overview of the Bill and other proposed reforms, don’t forget to check out our Employer’s Handbook to the Employment Rights Bill and beyond which gives an overview of the government’s reforms including in relation to day one rights for unfair dismissal, third party harassment and more. The handbook is currently being updated to reflect these latest amendments and we will continue to update it as the Bill progresses through Parliament.

Below is a summary of the key amendments brought forward this week:

Collective redundancy consultation

A protective award of up to 90 days’ pay per employee can currently be awarded where an employer has breached its duty to consult where 20 or more redundancies are proposed at ‘one establishment’ within a period of 90 days. The government was consulting on whether to remove or increase this cap and on whether to introduce interim relief when a claim was brought.

Following the consultation, the cap for the protective award will be increased to 180 days, but interim relief will not be available.

Other amendments

  • It was also proposed, in the first draft of the Bill, that the words ‘at one establishment’ would be removed from the trigger for collective redundancy consultation, which would have obliged employers to look across their entire organisation to assess whether the trigger for collective consultation was met. In a major concession to employers, the government has decided not to introduce this change so the ‘at one establishment’ wording will remain.
  • However, a second trigger for the duty to collectively consult will be introduced which may catch redundancies taking place across more than one establishment. Detail on how this second trigger will operate will be set out in secondary legislation.
  • The amendments also clarify that collective consultation will not need to be carried out with all employee representatives together, or with a view to reaching the same agreement with all employee representatives. This will be of particular relevance where the new trigger is in play and the duty to consult spans more than one establishment. The government will issue guidance in due course to help employers comply with the new consultation requirements.
  • The government has also said that it plans to consult on further ways to strengthen collective redundancy rights during 2025.

‘Fire and rehire’

The Bill introduces a new category of automatic unfair dismissal if an employee is dismissed because they did not agree to a variation of their contract of employment or where the employee was dismissed to enable the employer to hire a new employee or to re-hire the existing employee under a varied contract.

The government was consulting on whether to introduce interim relief for this type of claim. Following the consultation, the government has decided not to make interim relief available in these circumstances. However, it is still proceeding with its wider plan to make the practice of ‘fire and rehire’ automatically unfair save in very limited circumstances where an employer is in severe financial distress.

Strengthening statutory sick pay (“SSP”)

In addition to removing the waiting period for SSP, the Bill also extends eligibility for SSP to those earning below the Lower Earnings Limit (LEL).
The government was consulting on the percentage figure of normal weekly earnings which should apply to those earning below the LEL.

Following consultation, those earning below the LEL will be entitled to SSP at 80% of their normal weekly earnings (up to the flat rate of SSP) from day one of any sickness absence.

Zero-hours/low hours workers

The Bill requires employers to offer a guaranteed hours contract (GHC) to qualifying workers based on the hours they have regularly worked over a reference period (currently expected to be twelve weeks).

Following consultation, the right to a GHC will also be extended to agency workers. The obligation to offer a GHC will rest with the end hirer, but secondary legislation will maintain flexibility, in certain scenarios, to place the obligation on agencies or other intermediaries instead.

The Bill also contains obligations to provide workers with reasonable notice of shifts, shift cancellations and changes to shift.

Following consultation, these obligations will also be extended to apply to agency workers, with both the end hirer and agency being responsible for providing reasonable notice. Agencies will be responsible for making payments to workers which result from short notice cancellations, movements or curtailments of a shift, albeit the government anticipates that where ultimate liability for these payments lies may need to be determined by the commercial arrangements in place between end user and agency.

Other amendments
  • An amendment to the original Bill means that compensation for cancelled, moved or curtailed shifts will only be available where the worker ‘reasonably believed’ they would be needed to work the shift
  • In another significant change, the obligation to offer GHCs, reasonable notice to shifts and right to payment for cancelled, moved or curtailed shifts will not apply where there is a collective agreement in place that expressly excludes those duties/ rights and includes terms to expressly replace the excluded duties/ rights provided that the replacement terms are incorporated into the worker’s contract.

Industrial relations

A significant number of amendments are proposed as a result of the government’s consultation on the industrial relations framework.

The amendments include:

  • Extending trade union workplace access provisions to include digital access
  • Increasing the expiry period of mandate for industrial action from 6 to 12 months
  • Simplifying the information requirements for industrial action ballots and notices to employers
  • Preventing mass recruitment designed to influence the bargaining unit and prevent trade union recognition being granted
  • Ensuring that trade unions provide a 10-day notice period for industrial action (the original Bill had proposed moving this down from the current 14 days to 7)
  • A commitment to delivering e-balloting, with a pledge to launch a working group with trade unions and businesses imminently
  • The repeal of the 50% industrial action ballot turnout threshold will be subject to commencement on a date to be specified in regulations with the intention “to align as closely as possible with the introduction of e-balloting”. This is to ensure ‘‘that industrial action mandates will have demonstrably broad support”.

Requirement to keep records of holiday entitlement and pay

Employers will be required to keep records to show they have complied with Working Time Regulations’ obligations relating to annual leave including in relation to the amount of leave, pay for leave and pay in lieu when a worker leaves employment. Records will need to be retained for six years from the date they were made.

It will be up to the employer as to the format/ manner they chose to adopt in keeping those records (provided their approach is reasonable). Employers who fail to comply will be committing an offence and will be at risk of a fine.

Power for Secretary of State to give notice to employers of underpayments

The Secretary of State will have powers (presumably exercised through the Fair Work Agency) to give a ‘notice of underpayment’ to an employer where there appears to be an underpayment to a worker of a statutory payment such as SSP, holiday pay or national minimum wage. This notice will require the employer to pay the required sum to the worker within 28 days. Penalties (of 200% of the sum due up to a maximum of £20,000 and a minimum of £100) to be paid to the government’s Consolidated Fund will also be applied. If the employer pays the underpayment in full and 50% of the penalty within 14 days of the notice being given the penalty will be regarded as having been paid. A right of appeal will be available to the employer through the employment tribunal.

Where a worker has the right to bring proceedings in the employment tribunal but it appears to the Secretary of State that they are not going to, the Secretary of State (again one assumes through the Fair Work Agency) will have the power to bring proceedings about the matter, in the tribunal, in place of the worker. Any award by the tribunal may still be made in the worker’s favour.

In addition, the Secretary of State may assist a person who is or may be party to civil proceedings relating to employment or trade union or the law of labour relations by providing legal advice or representation or any other form of assistance, but this assistance will not extend to providing facilities for the settlement of the dispute.

Umbrella companies to be regulated for employment rights purposes

Umbrella companies will be brought within scope of the Employment Agencies Act 1973 meaning they will be regulated for employment rights purposes. Details will be set out in secondary legislation after further consultation takes place, aiming to ensure that workers have comparable rights and protections when working via an umbrella company as when taken on directly by an employment business.

Next steps

The Bill will be debated in the House of Commons before moving to the House of Lords where further amendments may be proposed so there is still a way to go before the final position is settled – and even then, much of the finer detail is to be decided by way of secondary legislation. However, what is clear from the government’s amendments is that it is holding firm on its promise to deliver the biggest overhaul of workers’ rights in a generation which, as we know, leaves employers with a lot to contend with.

We will continue to bring you updates in relation to the Bill and the government’s additional reforms outside of the Bill. Our Employer’s Handbook will also be updated on a regular basis.

How can we help?

With the Bill continuing its progress through Parliament, and implementation for much of the new law expected in 2026, employers are now starting to plan for its impact. We have been advising many employers on their likely obligations under the Bill and how they might look to comply. If we can help your organisation with any of these issues, please don’t hesitate to get in touch with Luke Bowery or your usual Burges Salmon contact.

Disclaimer: This update gives general information only and is not intended to be exhaustive. Although we have taken care over the information, you should not rely on it as legal advice. We do not accept any liability to anyone who does rely on its contents.

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