Further progress on the Employment Rights Bill

After passing through the parliamentary stages in the House of Commons, the Employment Rights Bill is making further progress towards becoming law continuing its journey through the House of Lords.

The proposed amendments tabled by the Government, following its responses to consultations carried out last year, will be progressed in the amended version of the Bill. Over 200 amendments were made by the government, resulting in the current version of the Bill being almost double the size it was when originally introduced to Parliament on 10 October 2024. Now at 310 pages in length, the potential impact on businesses countrywide is vast. So, let’s look at the key developments.

The amendments cover reforms to workers’ rights, including (but not limited to) Statutory Sick Pay, agency workers’ rights, collective consultation, and trade union rights.

Statutory Sick Pay

The Bill now proposes that statutory sick pay will be paid to all workers from the first day of sickness at a rate of either 80% of weekly earnings, or the flat rate, whichever is lower. This means those workers who earn under the Lower Earnings Limit will be entitled to up to £100 per week more than they are under the current system. The impact of this change cannot be understated. Sickness absence will cost businesses more, with the government’s own estimations showing a cost of £1.07bn.

Zero-hour and agency workers

Additionally, the previously proposed additional rights for those on zero and low-hour contracts will now be extended to cover agency workers too. This means the end hirer will be responsible for offering a guaranteed hours contract to agency workers who have worked for them over a yet to be defined period of time. On top of this, agency workers will be entitled to compensation where shifts have been changed, moved, or cancelled without ‘reasonable’ notice.

Collective consultation

Although not a change to any laws businesses must follow, the Bill now proposes to increase the protective award a tribunal can make where employers have failed to follow their collective consultation obligations in large redundancy or fire and rehire situations. Under the proposals, the amount will increase to up to 180 days’ pay from up to 90 days’ pay.

Fair Work Agency

Under the Bill, the Government will introduce a new regulatory body, which will be known as the Fair Work Agency. This agency will have the power to bring employment tribunal claims on behalf of individuals, provide legal support and assistance to those who have brought a claim themselves and enforce the payment of statutory payments to employees.

The Government confirmed that further detail on the Bill’s proposals will be outlined in later regulations and there will be further consultations later this year on some aspects of the Bill. This will include topics such as collective consultation thresholds where redundancies are being made at more than one establishment within a business.

All of the above proposals are in addition to those outlined in the original version of the Bill such as removing the qualifying period for unfair dismissal claims.

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