Employment Rights Bill: Government’s latest amendments explained

6 Mar 2025 | 7 minute read

Following Government responses to consultations launched back in October 2024, the Government has proposed a number of amends to the Employment Rights Bill which impact its proposals regarding:

Zero-hours contract measures which will be extended to include agency workers
Statutory sick pay
Remedies for failure to comply with collective consultation obligations
Trade Union law

What is changing in relation to zero hours contract measures?

In the Employment Rights Bill, the Government proposed to introduce a right for qualifying zero or low hours workers to:

be offered guaranteed hours where they work regular hours over a reference period (likely to be 12 weeks);
have reasonable notice of shifts and changes to shifts; and
receive a payment each time a work shift is cancelled, moved or shortened at short notice.

A lot of the detail as to how exactly these measures will work will be subject to secondary legislation which has not yet been published (for example, we still don't know what hours will qualify as low hours or what "short notice" means).

The Government consultation was specifically around how these proposed measures should apply to agency workers (on the premise that, otherwise, utilising agency workers would be a simple loophole to avoid the new zero hours contract measures).

In response to the consultation the Government has proposed amendments to the Employment Rights Bill which:

Will extend all the zero hours contracts measures to qualifying zero/low hours agency workers.
Will make it the responsibility of the end hirer (i.e. the business benefiting from the agency worker's services) to make the offer of guaranteed hours to a qualifying zero/low hours agency worker. Transfer fees and extended hire periods (governed by The Conduct of Employment Agencies and Employment Businesses Regulations 2003) will remain applicable in accordance with the commercial contractual agreement between the agency and the end user.
Will make it a joint responsibility of the agency and the end hirer to provide reasonable notice of shifts to zero/low hours agency workers. How this is done in practice will be a commercial matter between the agency and the end hirer.
Will make it the responsibility of the agency to pay any short notice cancellation or curtailment payments to agency workers, but with a right to recoup the cost of those from the end hirer if commercial arrangements between the agency and end-hirer allow this.
The government will consult about the proposed exception to the requirement to offer guaranteed hours to zero/low hours workers where there is a "genuine temporary work need" (which will be aimed to cover seasonal work which has been a significant criticism of the original measures first proposed).

There is still much to be clarified about the way the zero/low hours contract measures will work in practice. But, for now, it is sensible to take away from this that:

Utilising zero/low hours workers to cover variable work will become a lot more risky and administratively costly.
You will not be able to escape the bureaucracy of the zero/low hours contract measures by using agency work, so you will need to consider whether the new regime could work for your business or whether you might look at alternative models to cover temporary work (such as short-term fixed contracts).
You should consider the potentially significant changes (which are potentially due to come into force in 2026) into any new commercial agreements or renewals that you are entering with agencies.

What is changing in relation to statutory sick pay?

In the Employment Rights Bill, the Government proposed to change statutory sick pay (currently paid at a rate of £116.75 a week) so that:

It is payable from the first day of sickness absence (rather than the fourth after 3 waiting days); and
Should be payable to lower paid workers too (rather than reserved for those who are earning over £123 per week which is the current lower earnings threshold to become eligible for statutory sick pay).

The Government consultation was to canvass views on the rate of sick pay for those earning below the lower earnings threshold. The Government has proposed to make statutory sick pay payable for those below the lower earnings limit at a rate of 80% of normal weekly earnings.

Many businesses have expressed concern that making statutory sick pay payable to all workers from the first day of absence will increase costs and exacerbate absenteeism problems. These issues were raised in the consultation by some respondents but have not changed the Government's position. With these changes due to come into effect not before 2026, you will need to factor increased statutory sick pay costs into budgets and will need to refresh and retrain on absence management processes in order to seek to deter malingering and/or increasing absence levels.

What is changing in relation to remedies for failure to comply with collective consultation obligations?

In the Employment Rights Bill, the Government proposed to:

Make collective consultation obligations arise wherever a business was proposing to dismiss as redundancy 20 or more employees across the whole business in a 90-day period (rather than at one establishment only).
Make any so-called "fire and rehire" dismissal automatically unfair. This would include terminations where the reason for the termination is that an employee did not agree to an employer's attempt to vary their terms and conditions and/or where the employer intends to employ someone else in substantially the same role on varied terms and conditions). The only exclusion proposed is where a business is in financial difficulties which would qualify them for liquidation.
Lift the cap of 90 days gross pay on protective awards for failure to inform and consult in relation to collective redundancies (which include in the context of "fire and rehire" exercises if 20 or more employees are affected).
Consider introducing interim relief as a remedy for claims for failure to inform and consult in relation to collective redundancies in the context of "fire and rehire" exercises.

The Government consultation was specifically considering the proposed strengthening of remedies against abuse of rules on collective redundancy.

In response the Government has proposed:

Not to introduce interim relief as a remedy for failure to comply with collective consultation obligations (owing to concerns around implementation, the short deadlines and impact on overloaded tribunals).
To double the protective award for failure to inform and consult in relation to collective redundancies from 90 to 180 days gross pay per employee (noting this can be increased by 25% if an employer fails to comply with the Code of Practice on Dismissal and Re-engagement).

The amends the Government have drafted also suggest that they may change the threshold for collective consultation in a different way than envisaged, leaving scope for the threshold to be higher than 20 or a percentage of workforce, subject to secondary legislation.

Changes proposed to the protective award are not anticipated to come into force until 2026, but already the PR impact and potential legal penalties and costs involved with not complying with collective consultation obligations are significant. Seek advice if you are proposing changes to terms and/or redundancies which will impact 20 or more employees in one place of work (currently). It is also worth considering actioning any changes to terms that are needed by the business before the ban on doing so (which remains currently proposed) is introduced.

What is changing in relation to Trade Union law?

In the Employment Rights Bill, the Government proposed to:

lower hurdles required for statutory recognition of trade unions;
give trade unions a right or access to the workplace;
require employers to give a written statement to workers about their right to join a trade union;
provide extra protection for trade union representatives and members;
repeal legislation which gave the Government power to set minimum service levels during strikes in essential services and imposed limits on strikes in terms of the need for longer notice, higher ballot thresholds for specific public services, restrictions on picketing and for strike mandates to expire after 6 months.

The Government consultation sought views on the proposals.

In response the Government has proposed amends to the Employment Rights Bill:

To streamline the trade union recognition process by implementing the measures proposed originally, including keeping the lower threshold for recognition by requiring a union to simply show that 10% of a proposed bargaining unit are union members (with no need for majority support). The Government had been consulting on lowering the support threshold to 2% but the proposed amendment will not state a figure and will simply give the Secretary of State the power to lower the 10% threshold.
To make the trade union right of access to the workplace a digital, as well as a physical, one.
To require trade unions to provide a 10 days' notice period for strikes/industrial action (currently 14 days' notice is required).
To allow trade unions to utilise e-balloting.
To extend strike mandate expiry from 6 to 12 months.

What happened to the right to disconnect?

The Government had promised in its manifesto to bring in a "right to switch off… so that working from home does not result in homes turning into 24/7 offices". This pledge did not materialise in the proposed Employment Rights Bill when published (although it was referenced as part of the Government's intention in its Next Steps paper published alongside the Employment Rights Bill). Recent press reports suggest that the policy has now been dropped, allegedly in a concession to businesses in the wake of huge increases to employment costs in the form of higher National Minimum Wage and NICs.