Amendments proposed to the Employment Rights Bill

As things currently stand, the obligation to collectively consult is triggered when an employer proposes to dismiss 20 or more employees as redundant at ‘one establishment’ within a period of 90 days.

The government had previously proposed amending this so that the ‘one establishment’ test was removed, meaning that an employer would have to collectively consult whenever it was proposing to dismiss as redundant 20 or more employees within 90 days, even if those redundancies were spread across a number of sites. This could have triggered collective consultation very regularly for large multi-site employers, as all redundancies across the employing entity would have counted towards the trigger.

In a significant change to its previous stance, the government has reinstated the concept of ‘one establishment’. However, it has provided for regulations to be made to clarify the position where it is proposed that a particular number of employees (to be determined) are to be dismissed as redundant at more than one establishment. The Bill clarifies that employee representatives do not need to be consulted together and that an employer does not need to try and reach the same agreement with all representatives. This is in view of employer concerns about complexity / delay if employers are required to consult with employee representatives across different establishments.

Another significant proposal is that the protective award for failure to collectively consult will be doubled from 90 to 180 days’ pay. Although the government also consulted on possibly introducing interim relief as an additional remedy for failure to collectively consult, it has confirmed that it does not plan to do so at this stage.

The government has commented that guidance for employers on collective redundancy consultation will be published ‘in due course’. During 2025, it intends to consult on: (i) strengthening the collective redundancy framework (including doubling the minimum consultation period from 45 to 90 days for employers proposing to dismiss 100 or more employees), and (ii) updating the Statutory Code of Practice on Dismissal and Re-engagement to reflect the changes to the law on collective consultation, as outlined above.

The government has confirmed that the measures proposed in the Bill in relation to zero hours contract workers will extend to agency workers, including the rights to a guaranteed hours contract, reasonable notice of shifts, and compensation when shifts are cancelled, curtailed or moved at short notice.

It will be the responsibility of the hirer (not the agency) to offer a guaranteed hours contract to an agency worker in most circumstances, unless an exception applies. However, both the hirer and the agency will have joint responsibility to give reasonable notice of shifts. The agency must pay compensation for shifts which are cancelled, curtailed or moved at short notice, although it may be able to recoup this cost from the hirer by agreement between the parties (provided that the arrangement was entered into before a date two months after the Bill is passed and the arrangement has not been modified since).

Much of the detail in relation to the application of these provisions to agency workers will be set out in future regulations. The government intends to consult further on such regulations and will also develop guidance on the new measures.

In addition to the above, the government has proposed amendments to the measures applying to zero hours, low hours or agency workers. In particular, employers should note the following:

• Firstly, an amendment has been proposed to the Bill such that provisions relating to guaranteed hours, reasonable notice of shifts and compensation for cancelled, curtailed or moved shifts will be able to be excluded by way of a relevant collective agreement incorporated into their contract
• Secondly, an amendment has been proposed to add an additional ground of complaint where an employer has sought to avoid their obligation to make a guaranteed hours offer (in respect of agency, zero hours or low hours workers), for example, where they have deliberately limited the number of hours available to the worker during the reference period. This seeks to deter employers from attempting to use loopholes to avoid triggering their obligations.

The government has proposed numerous amendments to the Bill following its recent consultation on trade unions. We will be looking at this in further detail in a later insight, but some of the key amendments can be summarised as follows:

• The prohibition on unfair practices will be extended to the entirety of a recognition or derecognition process. Legislation will be amended to make it easier for unions to win cases where an unfair practice has occurred.
• Employers will need to share with the union the number of workers in a proposed bargaining unit within 10 days of a statutory recognition application being submitted and will not be able to increase that number.
• Access rights will be extended to include digital access and a fast-track route for achieving an access agreement will be introduced.
• A detailed framework for CAC fines will be introduced in relation to breaches of union access rights (to be the subject of further consultation).
• The current requirements for industrial action ballots will be simplified such that there will no longer be a requirement for the union to provide the number of employees concerned in each category or workplace or to provide an explanation of how the total number of employees was reached.
• Trade unions will only need to provide employers with 10 days’ notice of industrial action (the current requirement is 14 days). They will no longer be required to provide information as to the number of employees in each category that are expected to take part in the industrial action.
• Union members’ mandates for industrial action will expire 12 months after the date of the ballot (the current threshold is 6 months). It is proposed that this amendment will take place two months after the Bill is passed into law.

The current proposal in the Bill to repeal the 50% industrial action ballot turnout threshold will not be enacted immediately but will require separate regulations, the aim being to dovetail this change with the introduction of e-balloting.

The government intends to consult further on modernising the trade union landscape once the Bill is passed into law, including on lowering admissibility requirements for the statutory trade union recognition ballot process, on strengthening protections for trade union representatives and on delivering e-balloting and workplace balloting.

As previously set out in the Bill, the government is proposing that statutory sick pay (SSP) will be payable from day one of sickness absence (removing the current three-day waiting period) and the lower earnings limit for SSP eligibility will be removed.

Following its recent consultation, the government is now also proposing that, for those earning below the Lower Earnings Limit, SSP will be payable at 80% of an employee’s normal weekly earnings or the standard rate of SSP, whichever is lower.

A consultation on tackling non-compliance with employment rights and tax by umbrella companies was launched by the previous government, and HM Treasury published the current government’s response to this last week.

It is proposed that umbrella companies will be regulated more strongly and brought within the definition of an ‘employment business’. They will be regulated by the Employment Agency Standards Inspectorate (and eventually the Fair Work Agency – see below). There will also be changes in relation to tax compliance.

The Bill proposes to create the Fair Work Agency (FWA), which will be a new public authority designed to enforce certain employment rights.

A number of new amendments to the Bill will increase the remit of the FWA, so that it can:

• Bring an employment tribunal claim in place of the worker, or provide or arrange assistance to anyone who is party to employment proceedings (although the costs of this may be reclaimed out of any award the worker receives).
• Recover enforcement costs from employers who aren’t complying with the law. The way in which these costs will be calculated and charged will be set out in regulations.
• Enforce failure to keep adequate records of holiday pay. This is combined with a new proposed obligation on employers to keep records to show that they have complied with the law on holiday entitlement. Employers will need to retain these records for 6 years and any failure to comply will lead to a fine.
• Enforce failure to pay certain statutory payments to workers (including holiday and sick pay). The FWA will be able to issue a notice of underpayment to employers, requiring them to pay within 28 days, and a penalty of 200% of the sum due is proposed (payable to the Secretary of State).

A number of non-government amendments have been proposed to the Bill by other MPs, including domestic abuse leave, paid carer’s leave, increases to statutory maternity pay and paternity leave, the reintroduction of equality questionnaires, and an obligation upon employers to prevent violence and harassment in the workplace. However, given the current government’s significant majority in Parliament, it is unlikely that these proposals will be passed into law.

Having said that, there have been reports that the government is backing a non-government amendment to extent the current law on parental bereavement leave and pay to employees who experience pregnancy loss before 24 weeks, so we are anticipating that this proposal will be passed by Parliament in due course.