It's not over 'til it's over

As the Employment Rights Bill (ERB) continues to make its way through Parliament, a significant series of further amendments have been proposed by the House of Lords. If passed, some of the proposals would change key aspects of the Bill, so it is somewhat surprising that they have been introduced at this late stage in the Parliamentary debate.

In this briefing, we focus on the key amends likely to be backed by the government and to become law in due course. We have not covered any non-government amends as these are unlikely to be passed into law.

1. Ban on confidentiality clauses – harassment or discrimination

Since the #MeToo movement and recent guidance from the SRA on the responsible use of non-disclosure agreements (NDAs), there is perhaps more of a tendency for employers to pause and consider whether an NDA would be appropriate in cases of harassment and discrimination, rather than including one as standard.

The government is now intending to take this one step further. It is proposed that confidentiality clauses would be void (i.e. unenforceable) where they prevent a worker from disclosing or alleging ‘relevant harassment or discrimination’. This would include disclosing their employer’s response to the harassment or discrimination, or the making of the allegation or disclosure. This would apply to workers who are victims of harassment and discrimination as well as those who have witnessed it happening to someone else.

Interestingly, this ban on NDAs would not apply to claims for failure to make reasonable adjustments or victimisation - it is not clear whether this is deliberate or an oversight. However, it would mean that (theoretically at least) confidentiality clauses could still be used by employers in relation to those types of discrimination claims.

The ban would affect any agreement between an employer and a worker apart from ‘excepted agreements’ (yet to be defined). The government press release suggests that settlement agreements would be caught by the ban. However, there is a possibility that (as is the case in Ireland) an NDA requested by a worker would be an ‘excepted agreement’ and outside the scope of the new rules. As this reform was not included in the recent government roadmap, the likely implementation date is not yet clear.

TLT's thoughts

A number of legal provisions banning the use of NDAs in certain circumstances are already coming into force this year, including s17 Victims & Prisoners Act 2024 (see our recent client briefing here). The government’s new proposal widens this further to include harassment and discrimination claims as outlined above.

The proposal has been hailed as a victory for those who have suffered harassment and/or discrimination in the past and been ‘silenced’ by their employers. However, allegations of discrimination are not always straightforward. Settling discrimination claims could become less attractive for an employer where the risk of reputational damage remains, particularly where it has not had a chance to put forward its version of events. As such, there is a risk that this proposal could increase the number of claims in the (already stretched) Employment Tribunal system and significantly inflate costs for those bringing and defending claims.

Employers would be advised to start reviewing their employment contract and settlement agreement templates, as well as any relevant contractual policies, to consider whether amendments may be required. Given that an employer’s response to allegations of discrimination or harassment is also covered by the ban, employers may also wish to consider implementing additional training for HR and managers on dealing with grievances and disciplinaries, as well as continuing to tackle any cultural issues in the workplace that might lead to such allegations.

2. Softening of fire and re-hire provisions

The government is also now proposing to soften the provisions on ‘fire and re-hire’, so that dismissing someone for refusing to agree to a contractual variation (or to employ someone else to carry out substantially the same duties on different terms) will now only be automatically unfair in relation to ‘restricted’ variations.

As you might expect, a ‘restricted’ variation includes reductions to pay or holiday entitlement, as well as changes to pension schemes and working hours. It would also include where an employer adds a clause into an employment contract allowing the employer to vary terms and conditions without employee consent. It does not appear to include changes to an employee’s duties or place of work, but there is provision for the government to expand upon the list of restricted variations by way of future regulations.

The exception for an employer where the variation is required to address ‘financial difficulties’ would remain in place. However, various clauses would be added to ensure that the exception applies to public sector employers, who would have to show evidence relevant to the ‘financial sustainability’ of carrying out their statutory functions (with additional requirements applying to local authorities).

Where an employee is dismissed for refusing to agree to a variation which is not a ‘restricted’ variation, the dismissal would not be automatically unfair. Instead, the Tribunal would be required to assess the fairness of the dismissal in line with a specific set of considerations set out in the legislation.

It is also proposed that an employee would still be automatically unfairly dismissed where the reason (or principal reason) for the dismissal was to replace them with someone to carry out substantially the same duties who is not an employee, e.g. an agency worker. This covers off a loophole in the previous drafting of the ERB. However, such a dismissal would not be automatically unfair where an employee is dismissed in response to a genuine redundancy situation, or where the ‘financial difficulties’ exception applies.

TLT's thoughts

Although many employers will welcome a dilution of the current provisions in the ERB, arguably the ‘restricted’ variations relate to those terms most likely to form the subject of a fire and re-hire exercise anyway. As such, fire and re-hire is still only going to available in very limited circumstances.

Employers should consider whether they need to take any action in relation to staff terms and conditions before the stricter provisions come into force. We know from the government’s recent roadmap that the provisions on fire & re-hire are likely to be implemented in October 2026. Employers who do not have a variation clause included in employment contracts may wish to consider reviewing this before the new law comes into effect (albeit such clauses usually have a limited effect in any event).

3. Bereavement leave - pregnancy loss before 24 weeks

As expected, the recent list of amends also includes an extension to statutory bereavement leave to include pregnancy loss before 24 weeks. Pregnancy loss would include a miscarriage before 24 weeks as well as the failure of an embryo to implant after IVF treatment.

The mother (and others who satisfy specific conditions regarding their relationship with the mother – to be defined) would be entitled to at least one week’s leave, which appears to be unpaid. The government has committed to consulting on bereavement leave in Autumn 2025 in its recent roadmap, and further details of the right will be set out in future regulations. The roadmap suggests that it would come into force in 2027.

TLT's thoughts

Although this proposal will be welcomed by many, it is perhaps unlikely to have a significant impact. In the first instance, employees may be reluctant to disclose to their employer that they are trying to get pregnant. Employees are also more likely to take paid sick leave in such circumstances, rather than a period of unpaid leave. Nevertheless, this would certainly close an obvious gap in existing family friendly rights and remain a useful right for employees, particularly where they are the partner of a mother suffering pregnancy loss and cannot take sick leave themselves.

4. Zero / low hours workers (including agency workers)

A number of amendments have been proposed to the duty to offer guaranteed hours contracts to zero or low hours workers (including agency workers). The government is proposing that:

• the Secretary of State would be given the power to make further exceptions to the duty, subject to taking a non-exhaustive list of considerations into account;
• complex additional protection would be in place for agency workers to ensure their terms and conditions do not worsen as a result of a guaranteed hours offer;
• where an agency worker accepts a guaranteed hours offer, they will become a worker of the hirer, and the hirer will become their employer.

TLT's thoughts

The proposed new law on offering guaranteed hours contracts is complex, and we are still waiting for a great deal of additional clarification. In the meantime, these amendments make the rules relating to agency workers even more complicated.

Once the government’s intentions become clearer, employers who engage agency workers on zero or low hours contracts will need to ensure that HR and managers have a full understanding of the law in this area. The government is opening a consultation on zero hours contracts in Autumn 2025, with the provisions expected to become law in 2027, so there should be plenty of time for employers to seek advice and prepare.

Next steps

The proposed amends set out above are likely to be supported by the government and passed into law in due course.

It is widely anticipated that the ERB will not receive Royal Assent until Autumn 2025. Employers should therefore keep a watching brief for any further developments on the content of the Bill, and in particular consider responding to the various upcoming consultations as outlined in our previous briefing on the government’s roadmap.

Click here to listen to our Bitesize ERB series, which looks in further detail at different aspects of the Employment Rights Bill. Each episode is under 15 minutes, and provides you with insights, updates on any recent changes, and practical guidance to help your business prepare for the upcoming reforms. Further resources on upcoming employment law reform, including the ERB, can be found on our Employment Law Reform – In Focus page.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at 16 July 2025. Specific advice should be sought for specific cases. For more information see our terms & conditions.