Employment Rights Bill – latest updates

As many employers will be aware, the Government is proposing to introduce numerous amendments to the existing employment law framework in the UK and bolster the protection afforded to employees under the proposed Employment Rights Bill.

We have previously outlined the anticipated implications of the Employment Rights Bill in our article New Labour Government & Employment Rights. However, on 4th March 2025 the Government tabled various significant amendments to the Employment Rights Bill following consultations with business groups and unions.

This article explores the updates proposed and their implications for employers.

1. Collective redundancy consultation

Where a redundancy process affects 20 or more employees at one establishment, the employer is required to follow the collective redundancy consultation requirements which include, for example, strict timetables regarding the period over which consultation should take place.

If an employer fails to comply with the requirements, each and every affected employee can be awarded a ‘protective award’ of up to 90 days’ gross pay per employee.

The Government is proposing to increase the maximum amount which may be awarded as a ‘protective award’ for failure to properly collectively consult from 90 days to 180 days gross pay. This would obviously herald a doubling of the compensation which can be awarded, should the employer fail to meet the collective consultation requirements.

Employers will therefore need to be incredibly careful to ensure that they do not fall foul of these requirements when contemplating redundancies, which will trigger the collective consultation requirements.

2. Statutory Sick Pay (SSP) guaranteed for low earners

Currently, statutory sick pay (SSP) kicks in after a worker is unwell for more than 3 consecutive days. Under the new Employment Rights Bill, the Government intends to make SSP available from the first day of sickness absence, so dispensing with the 3 ‘waiting days’ which have been a key feature of the SSP rules.

Additionally, workers who are on ‘low’ earnings (which for these purposes means below the Lower Earnings Limit for National Insurance Contributions – this will be £125 per week from April 2025) and are unable to work due to illness, will receive either 80% of their average weekly earnings or the current SSP rate (whichever is lower). The Government estimates that this will benefit over 1 million low paid workers.

This will likely have a greater impact on small employers, who struggle to cope with absences and may also lead to a higher sickness absence rates. Although, it is hoped that it may also reduce the impact of ‘presenteeism’ – when employees who are unwell struggle into work to avoid losing pay, but in so doing also risk sharing any infectious condition.

3. Agency worker rights/zero-hour contracts

In its manifesto, the Government made clear that it intended to combat the inequities of one sided zero hour contracts. The latest measures involves extending this protection to agency workers as opposed to just those employees directly employed by the employer.

The main changes proposed largely mirror those proposed for zero hour workers, who are directly employed, namely:

• A guaranteed minimum number of hours after an initial period (expected to be 12 weeks);
• Reasonable notice of hours or shifts; and
• Compensation when shifts are cancelled, curtailed or moved at short notice.

Whilst these proposals are likely to provide workers with increased certainty around shift patterns and the income they will receive, this may well be problematic for certain industries who rely on temporary/ad-hoc workers.

It may also limit a company’s ability to retain a flexible workforce. Some industries utilise agency workers to cover short notice/emergency reductions in the work force and as such it is unclear how the workers could be given ‘reasonable’ notice of their shifts in this scenario.

4. Trade unions and industrial relations

Some of the key headline changes which are now proposed to the law affecting trade unions include:

• A requirement for a 10-day notice period for industrial action (increased from seven days in the initial draft of the ERB).
• The current Employment Rights Bill proposal 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 current mandate for industrial action expires after 6 months. The Employment Rights Bill will be amended to include a provision extending the mandate to 12 months.
• Unions will no longer need to ballot members every ten years regarding whether they wish to maintain a political fund. This will be replaced with a requirement that unions give members notice of their right to opt-out of the political fund every ten years.

5. Tackling non-compliance in the umbrella company market

An umbrella company acts as an intermediary between independent contractors and their clients or recruitment agencies.

Workers who are engaged via an umbrella company will receive comparable rights and protections to those taken on directly by a recruitment agency. However, there is still limited information as to how this is going to work in practice.

6. The Right to Switch Off

One significant omission from the changes proposed is the absence of a new ‘right to switch off’.

Originally the Government had indicated that it planned to bring forward some rules to this, building on the model operated in France.

It would appear that this is a casualty of the drive towards productivity and the Government paying greater heed to the concerns from business about the added burdens being placed on them.

Watch this space…

Further details regarding these and other aspects of the Employment Rights Bill will become clearer when secondary legislation is produced by the Government. Our Employment team will provide further updates in respect of the Employment Rights Bill as and when they are reported.

How can Morr & Co help?

If you have any questions or would like any further information on the content of this article, please do not hesitate to contact our Employment team on 01737 854500 or email info@morrlaw.com and a member of our expert team will get back to you.

Disclaimer
Although correct at the time of publication, the contents of this newsletter/blog are intended for general information purposes only and shall not be deemed to be, or constitute, legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. Please contact us for the latest legal position.