All change: Amendments to the Employment Rights Bill

The Employment Rights Bill marks a once in a generation shift in the employment law landscape. Last week, the government published responses to various consultations launched last October and as a result further amendments to the Bill have been proposed.

The amendments run to over 200 pages, which exceeds the current length of the Bill. This highlights the fact that there is still an enormous amount of work to be done on the Bill and on the Regulations which will have to be passed alongside it or at a later stage.

Here are some of the key proposed changes but we can anticipate more amendments and also amendments to amendments. This will run for some time.

Collective consultation:

The maximum protective award for failing to follow the collective consultation process will be increased from 90 days to 180 days – approximately six months’ full pay. This is bad news for employers but it could have been worse for them. A recent consultation on the subject considered having no limit to compensation and/or extending tribunals’ powers to grant interim relief, which could have voided many redundancies that were potentially in breach. The amendments do not go that far. 

The first draft of the Bill included a proposal to remove the words ‘at one establishment’ from the trigger for collective redundancy consultation, meaning employers would need to look across their entire organisation to assess whether the trigger for collective consultation (20 redundancies proposed within a 90 day period) is met. However, the government has decided that the ‘at one establishment’ wording will remain. This is good news for employers envisaging redundancies across a number of sites. However, a further amendment proposed would create a second trigger – higher than 20 - to catch redundancies taking place across more than one establishment. Detail on how this second trigger will operate will be set out in secondary legislation. This represents a major change, but nothing is yet certain. It will be interesting to see what change is actually made to the Bill following the Report Stage of its passage through Parliament.

Zero hours contracts: 

Obligations under the Bill to offer guaranteed hours contracts, provide reasonable notice of shifts and compensation where shifts are changed, curtailed or cancelled at short notice will be extended to cover agency workers. The end user client will have responsibility for offering the guaranteed hours contract to eligible agency workers, responsibility for giving reasonable notice of shifts will apply to both the end user and the agency and agencies will be responsible for making the compensation payments, albeit that they will be able to recoup these costs from the end user client in certain circumstances. 

As agency workers are used by employers to deal with changes in workforce demand, this is a major change in the Bill and a concern for businesses that use agency workers for flexibility.

Statutory sick pay:

The rate of SSP will be the lower of the flat rate or 80% of normal weekly earnings.

Trade unions: 

The notice to be given to an employer by a union for industrial action will be 10 days. In addition, the mandate for industrial action will be valid for 12 months (an increase from the current 6-month period). The amount of information that unions are required to provide when giving notice of a ballot for industrial action, notifying the result of the ballot and when giving notice of industrial action will be simplified.

The right of access will include digital access to a workplace. The government will issue regulations setting out a framework for the CAC to follow in respect of issuing fines for non-compliance with the right of access.

In terms of statutory recognition, the number of employees in the bargaining unit will be taken as at the date the CAC receives the application for recognition from the trade union. It can go down but cannot go up for the purposes of the recognition process. There will be a 20-working day negotiation period for parties to reach agreement on union access to workers in the bargaining unit which will run parallel to the negotiation period for agreeing the bargaining unit. The unfair working practices provisions will also apply from when an application for recognition is accepted by the CAC. The time limit for complaints to the CAC will be extended and the test to be applied by the CAC to determine a complaint will be amended. 

The government has also committed to delivering e-balloting for trade union ballots.

Umbrella companies: 

The government will amend the Bill to define and allow for regulation of umbrella companies for the purpose of employment rights. The Employment Agency Standards Inspectorate will be responsible for enforcing umbrella company regulations, although this will pass to the new Fair Work Agency once this is set up and operational. The government will also legislate so that from April 2026, where an umbrella company is used, responsibility to account for PAYE will sit with the recruitment agency that supplies the worker or, if there is no agency, with the end client. 

Other proposals that have been tabled to be considered by Parliament include obligations on employers to keep records to show that they have complied with certain entitlements in relation to annual leave; a commitment to introduce 10 days statutory leave for victims of domestic abuse and to provide for protection from detriment or dismissal for workers affected by domestic abuse as well as a requirement on employers to take reasonable steps to prevent their workers from experiencing domestic abuse and to put in place a domestic abuse policy; reintroducing statutory discrimination questionnaires; introducing carer’s leave pay with caring being classed as a protected characteristic; introducing kinship care leave and extending bereavement leave to include pregnancy loss.

Steps employers can take now to prepare

Review policies and working practices: Employers should review their current policies and procedures to identify which will need updating to bring them in line with the changes under the Bill.

Training and awareness: Employers should provide training to managers and employees on the new requirements.

Monitor developments: Employers need to stay informed about further amendments and guidance issued by the government. 

It is clear that there is still much to debate and clarify regarding the scope of the Employment Rights Bill. We will continue to provide updates as the Bill progresses through Parliament.