Employment Rights Bill six months on: where are we now?

Consultation papers and Government responses

On 21 October 2024, four consultation papers were published on:

• Strengthening statutory sick pay.
• Strengthening remedies against abuse of rules on collective redundancy and fire and rehire.
• The application of zero hours contracts measures to agency workers.
• Creating a modern framework for industrial relations.

On 4 March 2025, the Government published its responses and made significant amendments to the Bill as a result. These included:

• Employees having the right to SSP from the first day of sickness absence and receiving either 80% of their normal weekly earnings or the current rate of SSP whichever is lower.
• Increasing the maximum period of the protective award for failure to collectively consult from 90 days to 180 days.
• Ensuring that the new rights to guaranteed hours and security of income for zero hours workers extend to agency workers.
• Simplifying industrial action notices, extending the expiry of a trade union’s mandate for industrial action and improving the process and transparency around trade union recognition among many of the industrial relations changes.

For details of the Government’s amendments to the Bill, following its consultation responses, see our previous article Government responds to consultation papers.

Additional amendments to the Bill

As well as the amendments to the Bill due to the consultation responses referred to above, the Government made a number of significant, additional amendments on 5 March 2025. Here are some of the key changes.

Collective redundancy

The duty to collectively consult arises where an employer proposes to dismiss as redundant, within 90 days or less, 20 or more employees “at one establishment” (section 188 Trade Union and Labour Relations (Consolidation Act) 1992 (TULRCA). The high-profile Woolworths ECJ decision in 2015 held that the duty to collectively consult is triggered when the threshold is reached at a particular establishment rather than across the organisation. This meant that redundant employees at the smaller stores missed out on the protective awards for failure to collectively consult.

When the Bill was published last year, it amended section 188 TULRCA to omit “at one establishment” and made it clear that the duty to collectively consult would apply when the threshold is reached across the whole organisation and not at a particular establishment. This would have had significant implications for multi-site organisations. They would have to collectively consult more often because the duty would be triggered more easily when taking the “across the organisation” approach rather than the “at one establishment” approach. Indeed, the CBI and CIPD both expressed concerns about the proposal.

In a very significant amendment, on 5 March 2025, the Government proposed that the collective redundancy obligations will be triggered where:

• Either 20 or more redundancies are proposed at one establishment (as under section 188 TULRCA).
• Or at least the “threshold number of employees” are proposed to be made redundant across the employer’s organisation.

Details of the “threshold number” will be set out in regulations following detailed consultation. It may be a specified number, a particular percentage of total employee or determined in another way specified in the regulations. However, the “threshold number” will not be lower than 20 employees. The Government says that it will “set the thresholds for this new requirement at a level that balances the needs of growing business and protecting the rights of employees”.

Enforcement

Currently, there are multiple different enforcement bodies reporting to different Government departments. A new Fair Work Agency bringing together existing enforcement bodies was included in the original Bill. Having one enforcement agency is intended to make it easier for individuals to know where to go to for help and will mean a more effective use of resources but the Government accepts that creating the Fair Work agency “is complex”.

The Government has now included significant new enforcement powers in the Bill and these include:

• Notice of underpayment by the Secretary of State where an employer has failed to pay a worker an amount due such as the minimum wage, statutory sick pay and holiday pay. The notice will require the employer to pay the amount due within 28 days and will apply to sums that become due in the six years before the notice is given.
• Penalties will also be imposed on an employer who has been given a notice of underpayment and the penalty must be paid within 28 days. The maximum penalty will be £20,000 although there will be circumstances in which a penalty is not imposed.
• Power to bring Employment Tribunal proceedings by the Secretary of State where a worker has decided not to bring proceedings. In this surprising development, the Secretary of State would bring proceedings in place of the worker. The Employment Tribunal can still make a financial award, etc in the worker’s favour if the claim succeeds. At this stage, without any further details, we do not know how this will work in practice and effective funding of the Fair Work Agency will be crucial.
• Power to provide legal assistance whereby the Secretary of State may assist a person who is or may become party to civil proceedings relating to employment or trade union law or the law of labour relations. The assistance may include legal advice, legal representation or any other form of assistance but does not include facilities for the settlement of a dispute. This is another surprising development and we don’t have any other details at this stage. Interestingly, where assistance has been provided and the person is entitled to be paid costs in the proceedings, the Secretary of State can recover the costs of providing assistance.   

Zero hours contracts

Extensive amendments were made to the Bill to reflect the Government’s response to the consultation paper extending the right to guaranteed hours, to reasonable notice of a shift and payment for cancellation or change of a shift to agency workers. These were covered in our previous article Government responds to consultation papers.

Additional amendments have been made to the Bill regarding zero hours contracts.

Anti-avoidance measures have been proposed in relation to the guaranteed hours provisions. Where an employer tries to manipulate their obligation to make a guaranteed hours offer by offering fewer guaranteed hours than the threshold number, or not offering guaranteed hours at all, there will be the right to bring an Employment Tribunal claim. This amendment to the Bill adds an additional ground of complaint regarding Employment Tribunal proceedings.

In addition, the Government recognises that “there are cases where unions and employers working together may want to agree more tailored conditions than the provisions allow, and which would benefit both the workers and the employer, given the unique context of that particular sector”.

Accordingly, an amendment to the Bill provides that the right to guaranteed hours, to reasonable notice of a shift and payment for cancellation or change of a shift can be contracted out of by a collective agreement between a trade union and an employer.

Pregnancy dismissals

The Bill contained proposals to deliver stronger protections for pregnant women and new mothers returning to work including protection from dismissal whilst pregnant, on maternity leave and within six months of returning to work.

Recent amendments provide that regulations will be made to cover the notices to be given, evidence to be produced and other procedures to be followed by employees and employers and the consequences of failing to comply.

Working time records

There will be a new obligation on employers to keep records relating to annual leave and pay. This will include in relation to irregular hours and part-year workers. The records need to be kept for six years and “may be created, maintained and kept in such manner and format as the employer reasonably thinks fit.” There will be a fine for failing to comply with the duty.

Bereavement leave

All the amendments above are Government amendments and will be progressed. Many non-Government amendments were also proposed but were not accepted except for an important change to the proposals relating to bereavement leave. Currently, there is only a right to parental bereavement leave of two weeks if a child dies under the age of 18 or where a child is stillborn after 24 weeks. Originally, the Bill proposed a new general right to bereavement leave.

The Government acknowledges that more can be done to support parents who experience pregnancy loss before 24 weeks and it has accepted the principle of bereavement leave for pregnancy loss.

Next steps

The Bill will continue to be debated in the House of Lords and possibly amended further.

We are also waiting for a number of key consultation papers. Regarding the unfair dismissal proposals, we know that the Government will consult on the length of the “initial period of employment”, how the “lighter touch” standards for dismissal will operate and the unfair dismissal compensatory award regime. There is no information at the moment about when this consultation paper (and others) will be published. There is still a long way to go and we will keep you updated.

Employment Rights Bill 5 March 2025