Employers do not usually need to get caught up in the various amendments that get made to Bills before they become law. The Employment Rights Bill (Bill) is now being considered in the House of Lords and, while we expect it to receive Royal Assent later this year, its main provisions are not likely to come into force before October 2026. However, given the significance and scale of the Bill, some recent amendments to the Bill are worth highlighting at this stage. These are:
Collective redundancy consultation
An amendment to increase the protective award from the current maximum of 90 days' pay to 180 days' pay (this award is per employee, where there has been a failure to inform and consult collectively). This will act as a significant deterrent for businesses that are proposing to make redundancies of 20 or more employees, making compliance with collective redundancy information and consultation obligations more likely.
A previous amendment, which would have required employers to aggregate proposed redundancies across sites when deciding whether the numbers threshold of 20 was met, in effect getting rid of the current requirement to consider the position 'at one establishment', has now been dropped. Instead, the Bill provides that collective redundancy obligations may be triggered where fewer than 20 redundancies are proposed in certain circumstances, for example where a certain percentage of the workforce may be dismissed. The details of this remain to be fleshed out.
Fire and rehire
While the provisions which would prevent businesses from firing and rehiring staff on lesser terms remain in the Bill, the proposal to allow the courts to order a continuation of the contract in such circumstances, pending a legal determination of the case (known as interim relief), has been removed.
Statutory Sick Pay (SSP) for low earners
The Government has amended the Bill to provide that low earners, which are those earning below the prevailing rate of SSP (currently £116.75 a week), will receive whichever is lower, 80% of their average weekly earnings, or the prevailing rate of SSP. The Government estimates that this will entitle 1.3 million workers to SSP for the first time.
We already know that there is a plan to abolish the first three days as 'waiting days', so SSP will be payable from day one of employment. This additional cost which will be particularly significant for SMEs.
Notably, there is no amendment to suggest that SSP will be extended to the self-employed or workers. There is no plan to change the requirement that medical evidence need only be provided after the first seven days.
Offering guaranteed hours to agency workers
Regarding the proposal to offer zero hours workers a regular contract after 12 weeks (the likely reference period, yet to be confirmed), the Bill now sets out how this will work with regard to those employed through an employment agency. Most notably, the end hirer will become responsible for making the offer of guaranteed hours (this may be opted out of through a collective agreement with a trade union). The obligation to provide reasonable notice of shifts will fall on the employment agency and end hirer. Compensation for shifts cancelled or curtailed at short notice will be payable by the employment agency.
Trade unions
One broad point of interest is that the Bill now provides for digital access to workplaces for trade unions to both support employers and talk to them about joining a union, reflecting a desire to keep up with modern workplace practices, for example where people work remotely who are more easily contactable by either email or intranet posts. When accessing workplaces employers will be barred from carrying out practices which may impede unions at the start of the process. Some of the technicalities around trade union rights have been reduced and the notice for strike action will be cut from 14 days currently to ten days.
Umbrella companies to be regulated
Individuals providing their services through a third party which is operating as an umbrella company, will enjoy greater clarity about their tax and employment status as a result of the Government inserting amendments which define, for the first time, what an umbrella company is. The amendments will also provide for the conduct of umbrella companies to be regulated, much in the same way as employment businesses are.
Underpayments and enforcement of employment rights by the Government
One of the most significant amendments is the proposal to set up a new framework for the enforcement of employment rights by what will become the Fair Work Agency (FWA). While we knew this body was contemplated in the first draft of the Bill, the Government has now fleshed out the proposals. It is envisaged that:
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The FWA will be able to issue a notice of underpayment to an employer where an employer has failed to pay employees fixed sums due under the contract, such as holiday pay, national minimum wage or SSP. This will not apply where there is litigation going on. Employers will have 28 days to make good the amount (reduced by 50% if paid within 14 days) or else face a fine (maximum of £20,000 per employee).
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Apart from this, the FWA may be empowered to bring claims on behalf of individuals for the enforcement of other employment rights in the Employment Tribunal where it is clear that the employee is not intending to bring a claim on their own behalf. The Bill provides that the Government/a Government body may provide or arrange for legal assistance or advice in connection with such claims. In such circumstances, legal costs might be recovered.
If these proposals become law, this would truly be a radical departure to the way in which employment rights have been enforced to date in the UK.
It is also worth noting the following further amendments or omissions:
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It is being reported that an amendment which would introduce statutory bereavement leave for those suffering pregnancy loss before 24 weeks will receive Government backing.
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There is a proposal to amend the Working Time Regulations, requiring employers to keep records of paid annual leave for a period of six years, with a fine being a sanction.
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The 'right to switch off' has been dropped from the Bill.
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The Liberal Democrats have proposed a new protected characteristic for the Equality Act 2010, namely being a 'carer' but it is not being reported that this has Government backing.
