Employment Rights Bill Series continued

Early March 2025 Reports, consultation responses, amendments and looking ahead to a third reading of the Employment Rights Bill.

Developments this week 

This week has seen a flurry of government activity ahead of the imminent next formal stage of the Bill, its ‘report stage’ and third reading in the House of Commons next Tuesday and Wednesday, 11 and 12 March.  

Whilst there have been a host of amendments put forward previously to the ERB at the committee stage, and over 250 more have been tabled this week (as reported further below), there is further opportunity for yet more amendments to be proposed and discussed at the third reading next week.  

With that in mind, on Monday 03 March the Business and Trade Committee published a report on its inquiry into whether the Bill would achieve its aims. It identified still further areas for potential change. Some of its key recommendations were that:

• More detail should be included in the Bill itself on key issues and not left to further regulations so as to avoid the Bill, once passed, simply giving a ‘regulatory blank cheque’ to the secretary of state for setting the actual rules, which will not receive the same level of parliamentary and public scrutiny, consultation and debate.
  
  
• In particular, they were keen for definitions to be provided for:
  • Guaranteed / zero hours: the reference period for calculating the appropriate level of guaranteed hours
  • Reasonable notice of shifts and compensation for cancelling, moving or shortening shifts at short notice: ‘reasonable’ and ‘short’ notice;
• ‘Low hours’ (as opposed to zero hours) contracts should be removed from the guaranteed hours provisions so as to avoid:
  • the difficulties identified by many in setting that ‘low hours’ threshold at an appropriate level; and
  • any such threshold effectively creating a loophole whereby employers could simply set their employees’ contracted hours just above threshold to avoid being caught.  

This does not appear to have been carried forward as a proposed amendment as yet, so it will be interesting to see what happens, if anything, in this respect next week. 

• Fair Work Agency: How will the agency work with EHRC on overlapping responsibilities concerning enforcement of equality law / rights; and other enforcement bodies? Also, the government needs to consider resourcing and the roles and scope of the respective bodies. 
• Industrial relations: clarification that access to a workplace includes via digital (as well as physical) means.  

The Business and Trade Committee also identified that matters outside the scope of the Bill may be affected by it and also need consideration, including: 

• Employment status: Immediately bringing forward plans to review and consult upon moving from the current three-tier employment status model (employees, workers and self-employed) to ensure the changes in the Bill are applied to all appropriate staff and to avoid ‘false self-employment’ being used to circumvent the provisions of the Bill in the meantime.
• Fair Work Agency: How will it work with EHRC on overlapping responsibilities concerning enforcement of equality law / rights? Also, the government needs to consider resourcing, and the roles and scope of these and other relevant enforcement bodies.
• Umbrella company market ‘non-compliance’: Responding to the previous government’s dormant consultation on this alongside its own ERB consultation responses (see below), Labour confirmed its intention to tackle this issue from employment, regulatory and tax perspectives. The employment issues will be addressed via an amendment to the ERB which simply paves the way for regulations to be set in future to ensure those working via umbrella companies have comparable rights to those employed by agencies (or ‘employment businesses’).
• Modern Slavery Act: this act requires its own amendments to address transparency and due diligence in UK private sector business to avoid use of products made using forced labour.
• Costs on business: Government needs to ensure employers are supported with implementing the changes introduced by the ERB and the Committee recommends ACAS is tasked with raising awareness and promoting good practice. Notwithstanding the heading’s reference to the cost to employers, no specific financial recommendation is made.   
• Industrial relations: further amendments to TULCRA will be required to marry up with the ERB’s changes regarding recognition ballots. The Committee also recommends the introduction of transparency measures around industrial disputes including in relation to costs of ballots.

On Tuesday 04 March, the government also published its responses to four key ERB consultations, the first four of which are specifically about the Bill and, alongside these, its proposed amendments to the Bill. The key proposals resulting from these are set out below:

• Strengthening Statutory Sick Pay (SSP)
  To bolster the Bill’s provisions making all employees eligible for SSP (by removing the existing lower earnings limit), the government also now proposes to improve the rate of sick pay lower earners will receive. The amendment proposes sick pay will be at the lower of either the SSP rate or 80% of the individual’s average weekly wage.
• Despite noteworthy concerns and objections from employers / business during the consultation, the government has not, however, changed its position on making SSP available from the first day of sickness by removing the current ‘waiting period’; and this is set to go ahead.
  
  
• Collective redundancy remedies and fire and rehire
  The government has proposed an amendment to double the maximum protective award from 90 to 180 days’ pay for a breach of an employer’s collective redundancy consultation obligations.
  However, it will not press ahead with the idea of introducing interim relief awards in fire and re-hire claims. An interim relief order is available in particular types of unfair dismissal claim and requires an employer to reinstate a dismissed employee, or at least pay their salary and benefits, until the unfair dismissal hearing takes place.
  
  
• Creating a modern framework for industrial relations
  The issues covered in this consultation related to trade union recognition, industrial action and access. In its response the government identified some aspects that can be addressed via amendments to the ERB and others that will be the subject of future consultation / legislation. The ERB amendments will address:  
  • Extending existing protections against ‘unfair practices’, which are actions to improperly influence the outcome, during a union recognition process; 
  • Allowing digital access to a workplace for collective bargaining purposes as well as the physical access already included in the Bill;
  • Notice of industrial action: The Bill originally proposed to change the notice given to employers from the current 14 days to seven days, but the government now proposes to amend this to ten days following the consultation.
  • Following a successful ballot, a union’s mandate to take the relevant industrial action currently lasts six months but the government’s ERB amendment proposes to increase this to 12 months. 
    
    
• Application of the Bill’s zero hours provisions to agency workers The government intends for this to go ahead with end users usually being responsible for offering guaranteed hours to match those hours worked over the relevant reference period (probably 12 weeks) but with some flexibility in certain circumstances (to be set out in later secondary regulations) for the agency to do so.
  
  Also, there will be joint responsibility for the agency and end-user to provide reasonable notice to the worker of shifts and shift changes / cancellations, with the agency carrying the burden of compensations payment for short-notice changes or cancellations. However, the agency and end-user can agree for recoupment of such compensation costs from the end-user.
  
  Of all of the consultation responses, the confirmation that the government intends to proceed with extending the zero and low hours provisions to agency workers seems to have been taken with the least good humour by business / employer representative bodies. They remain resolute in seeking to dissuade the government to carry this forward at the final House of Commons stage next week.  

On Wednesday 05 March, the government published its Report Stage amendments, which includes its own and all non-government amendment proposals. It is these which will be considered in parliament next week.  

Bracing for more next week 

The Bill, which stands at circa 200 pages, and its proposed amendments, which are now 215 pages long, will be considered by the House of Commons over two days next week. We will, of course, report on the outcome and developments in the next editions of the ERB Series.