Employment Rights Bill enters next stage: Responses to consultation and amendments

5 March 2025 6 min read

By Rachel Chapman

At a glance

The government published its responses to five consultation papers on aspects of the Employment Rights Bill (ERB) and put forward amendments to the ERB following consultation with businesses and trade unions.
Changes relate to penalties for collective redundancy breaches; guaranteed hours contracts; statutory sick pay (SSP); creating a modern framework for industrial relations; and tackling non-compliance by umbrella companies.
On 5 March the government published a list of further amendments to the ERB which did not feature in the responses to consultation.
The ERB will have its third reading next week.

Today the government published its responses to five consultation papers on aspects of the ERB and put forward amendments to the ERB following consultation with businesses and trade unions.

Increased penalties for collective redundancy breaches

The maximum protective award for failure to collectively inform and consult on collective redundancies will increase from 90 days’ pay per employee to 180 days’ pay. Employment tribunals will continue to have discretion to vary the length of the protected period, up to the maximum, as they consider just and equitable in all the circumstances, having regard to the seriousness of the employer’s default, as well as any mitigating factors.

The government has decided against extending the availability of interim relief to fire and rehire dismissals or collective redundancies at this time.

Guaranteed hours contracts: Agency workers

The provisions of the ERB which guarantee zero and low hours workers the right to a contract which reflects the hours they regularly work will be extended to agency workers. Agency workers will also benefit from increased security to receive reasonable notice of shifts and proportionate pay when shifts are cancelled, curtailed or moved at short notice – whilst retaining the necessary flexibility for employers in how they manage their workforces.

The government has tabled amendments to the ERB which would allow the implementation of an obligation on end hirers (rather than the agency) to offer guaranteed hours to qualifying workers.

However, responsibility for reasonable notice will be placed on both the employment agency and the end hirer for providing an agency worker with reasonable notice of shifts. Either party might be responsible in practice for providing unreasonable notice of shifts to an agency worker, so the government wants to ensure a tribunal can appropriately apportion liability in these circumstances based on responsibility of each party.

The government has tabled amendments to the ERB, which would allow responsibility to be placed on employment agencies to pay short notice cancellation or curtailment payments to eligible agency workers. Employment agencies will be enabled to recover from the hirer the proportion of payments made to agency workers for short notice cancellations, movements or curtailments that reflects the hirer’s responsibility for cancelling, moving or curtailing the shift at short notice. However, this provision will only apply where the arrangement between the employment agency and the hirer was entered into before a date two months after the ERB is passed.

The government is not proposing any changes to the current system of transfer fees or extended hire periods. The government believes that agencies should continue to be allowed to include transfer fees or extended hire periods in contractual agreements with end hirers, as they now are, including in future situations where an agency worker accepts a guaranteed hours offer from an end hirer.

Statutory sick pay

Lower paid employees who currently do not qualify for SSP will be entitled to SSP at the lower of 80% of their average weekly pay, or the standard rate of SSP (currently GBP116.75 per week). The SSP measures in the ERB will widen eligibility to the up to 1.3 million employees who are currently not entitled.

These changes are in addition to removal of the waiting period making SSP a day one right.

Creating a modern framework for industrial relations

The government is updating the legislative framework in which trade unions operate to align it with modern work practices.

The Code of Practice on access and unfair practices during recognition and derecognition ballots will be extended to cover the entire recognition process from the point when the Central Arbitration Committee (CAC) accepts the union’s application for statutory recognition.

The ERB will be amended to provide that at the point the CAC receives the application from the union, the number of workers in the proposed bargaining unit provided to the CAC by the employer cannot be increased for the purposes of the recognition process (it may go down through normal departures, for example, workers leaving, retiring, etc.). An employer would be free to recruit more staff post the date when the CAC receives the union’s recognition application, but these new staff would not be eligible to count towards the number in the bargaining unit for the purposes of the recognition process and would not be entitled to vote in any subsequent recognition ballot.

The government will be introducing a new clause in the ERB to reduce the information required in ballot notices for industrial action. This will remove the requirements for a trade union to provide information as to the number of employees concerned in each category or workplace and to provide an explanation of how the total number of employees concerned was determined by the union.

The government will be bringing forward an amendment to the ERB to reduce the information unions are required to provide employers in notices of industrial action. This will remove the requirement for a trade union to disclose the number of employees in each category that are expected to take part in the action.

The government has also decided to extend the expiration date of a trade union’s legal mandate for industrial action from six to 12 months following the ballot.

The government also intends to bring forward a ten day notice period (extending the current seven days) for industrial action.

Tackling non-compliance by umbrella companies

The government will act to ensure that workers can access comparable rights and protections when working through an umbrella company as they would when taken on directly by a recruitment agency. Enforcement action can be taken against any umbrella companies that do not comply.

Update: Further amendments published

On 5 March the government published a list of further amendments to the ERB which did not feature in the responses to consultation. If passed, the most significant changes will be:

An obligation on employers to keep records of annual leave which are adequate to show whether the employer has
complied with the entitlements conferred by the Working Time Regulations 1998 and retain such records for six years from the date on which they were made.
The government will have new enforcement powers in relation to underpayment of payments required by statute (including holiday pay and SSP) which will allow the government to take enforcement action in respect of up to six years of underpayments, requiring payment of the underpaid amount to the individual and payment of a penalty to the government. The maximum penalty will be GBP20,000 per individual.
Power for the government to bring tribunal proceedings on behalf of a worker and/or to assist a person who is or may become party to civil proceedings in England and Wales or Scotland relating to employment or trade union law or the law of labour relations by providing or arranging for the provision of legal advice, legal representation or any other form of assistance.

The ERB will have its third reading next week.

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