Our latest podcast by Rebecca Cairney and Ian Pace will be a quick roundup of the proposed changes to the Employment Rights Bill.
Transcript
Ian: Everybody. Welcome to the next edition of the Employment Insights podcast. My name is Ian Pace. I'm a Partner based in Weightmans Manchester office.
Ian: I'm joined today by Rebecca Cairney, who is a Principal Associate in the Employment team based in Liverpool. Hi, Rebecca.
Rebecca: Hi, Ian, and hello, everybody.
Ian: Today we're going to do a quick roundup of the proposed changes to the Employment Rights Bill.
Ian: So, Rebecca, what is the latest position on the bill?
Rebecca: Yeah. So, the Employment Rights Bill went through its third reading in the House of Commons on the 11 and the 12 of March 2025, and, actually, there were some notable amendments proposed in those discussions.
Rebecca: The updated bill is being passed to the House of Lords, and that will be debated there, in a second reading on the 27 March.
Rebecca: So, some of the some of the amendments, one of which is the Fair Work Agency.
Rebecca: So really, really important update this. They will be empowered to bring employment tribunal proceedings on behalf of workers.
Rebecca: They will also be able to provide workers with legal assistance including advice and representation when pursuing an employment tribunal claim.
Rebecca: It will be able to issue a notice of underpayment of monies owed to a worker. So, for example, if it's in relation to statutory sick pay or national minimum wage for periods going back up to 6 years, which the employer will then be required to pay. And then on top of all of that, they will have the ability to impose financial penalties on employers.
Rebecca: So, a really, really key and important update there.
Rebecca: And it's probably also worth noting that there was some comment made about, the low number of national minimum wage violation prosecutions.
Rebecca: And it seems to be an indication really that this is really going to be a focus of the Fair Work agency. So, something to really keep an eye on.
Rebecca: Then some of the other amendments. So, agency workers, it's been proposed that they will be included in the new guaranteed hours and reasonable notice of shift changes and provisions, kind of colloquially referred to as these zero hours provisions.
Rebecca: On collective consultation, so there is a proposal in the original draft to remove the words at one establishment from the existing law about when the duty to collectively consult commences.
Rebecca: And that seems to have been revised following some significant opposition during consultation and debate. So, there were some real concerns raised, related to large employers who have many sites, which would potentially be, in an ongoing state of consultation if that wording was removed.
Rebecca: And so, you know, potential consequences of that would have included, you know, potentially unrelated consultation exercises becoming extremely effective, and those concerns do appear to have been heeded by the government with these changes made to the wording and the proposals.
Rebecca: So, they have confirmed that the need to consult will arise when there's 20 or more redundancies proposed within 90 days at one establishment, so that will stay in place. But there will also be a new provision specifying a different threshold, that we haven't got yet that hasn't been set out, but will presumably be higher than 20 that will be used when redundancies are being made at more than 1 establishment.
Rebecca: So, it's not been, I suppose, completely taken away, but they have listened to some of the employer concerns and have put some amendments in place in relation to that. And obviously, there's going to be further detail required as to what that threshold will be.
Rebecca: Then for failure to collectively consult, the compensation amount for protective awards will increase from 90 to 180 days, so doubling, in the compensation, arena.
Rebecca: Umbrella companies will be brought within scope of the employment rights bill, and provisions will be included to regulate these businesses in a similar way to, other employment businesses such as agencies for things like tax and employment rights matters.
Rebecca: Trade unions will have rights of access to workplace and communication with workers, and there's been some clarity that that will also include digital access and communication as well as physical.
Rebecca: They are introducing bereavement leave specifically for pregnancy loss. So, during the commons debate, the government accepted a proposal to introduce a separate right to bereavement leave where that includes pregnancy loss.
Rebecca: So in addition, to the current bereavement leave entitlements, and that this could like was likely to be addressed, during the house of lords stages.
Rebecca: And then some confirmation finally on statutory sick pay rates for low earners. So that will be at 80% of normal weekly pay if an employee's normal weekly earnings are less than the statutory sick pay rate. So that 80% percentage had not been set in the original bill, pending some consultation on that point. So that's now been confirmed at the at the 80%.
Ian: That's some really important changes there. And you mentioned that the Fair Work Agency and, you know, as you said, the potential there is for national minimum wage really to come under sort of increased focus. I think there's a lot of reliance at the moment on name and shame, isn't there? But, in terms of prosecutions, as you've said, prosecutions don't really seem to be, in too much focus.
Ian: So, yeah, that's going to be a massive change. And actually, when you mentioned there about legal assistance and advice and representation and tribunals, on the face of it, that might look like a tricky issue for employers. But I suppose on the positive, you could say, well, actually, that type of representation and advice at the outset might actually help to focus some claims. I'm sure, you know, you've dealt with a number of claims that have had claims which have been sort of quite wild or spurious perhaps.
Ian: And, and perhaps that might help just to focus the type of allegations that that are being made. So, they're really important changes that are clearly going to be changed and added. But from the existing legislation that we already have, is anything going to be taken away?
Rebecca: So, there were a few things that have been amended and taken out from the original proposal of the bill. So, this right to disconnect has been completely abandoned, so they're not going to be pursuing that and moving forwards with it.
Rebecca: The discrimination questionnaires, they've confirmed that they're not going to be brought back, but they are going to be looking at the impact of this and giving close consideration as to whether that's something that might be introduced in the future.
Rebecca: And then finally, they've removed the interim relief for fire and rehire dismissals because I know there was there was quite a lot of concern about that coming into force. So, yeah, that's the that those three things have been removed from the original proposals.
Ian: Okay. And you said it's been through its third reading, I think you mentioned, in the House of Commons, over the last two weeks. Is there anything else of interest that's come out of the commons at all?
Rebecca: Yeah. So a few things, really.
Rebecca: There there's likely to be a review of rights around things like family leave and pay, and it sounds like, that's going to take place this summer. So there was some mention of that taking place in June this year. So they'll be addressing issues such as paternity leave and carers leave and having a closer look at some of those things.
Rebecca: I think it's also really important to note that the Business and Trade Committee actually published a report following its inquiry into whether the bill would achieve its aims or not on the third of March. And it did identify some further areas for potential change.
Rebecca: So, asking for things like more detail in the bill itself on some of these key issues rather than leaving them to further regulation.
Rebecca: And what they said was that they wanted to avoid the bill once that's passed, simply giving the regulatory blank check to the secretary of state for setting the actual rules, which would obviously then not receive the same level of parliamentary and public scrutiny and consultation and debate.
Rebecca: So a real, concern, I suppose, that the bill itself includes the detail rather than leaving that, for the regulator to sort at a later date.
Rebecca: They also, were very keen for some definitions to be included. So for things like the, reference period for calculating the appropriate level of guaranteed hours in the zero hours considerations and, definitions for things like what amounts to reasonable or short notice, when looking at shifts and compensation for cancelling, moving, or shortening shifts at short notice. So really drilling down into the detail here.
Rebecca: You know, similar similarly with the low hours, as opposed to zero hours. So, removing that so as to avoid some of the difficulties that people have identified, in trying to set what a low hours threshold might look like, and effectively, I suppose, using that to create a bit of a loophole where employers could simply set employees' contracted hours just above that threshold to then avoid being caught by that legislation.
Rebecca: So, yeah, some, again, some really key, you know, requests there from, from the from the committee, you know, asking for some of that that detail to be included.
Rebecca: And then finally, just a query really about the Fair Work agency and how that agency would interact with things like the Equality and Human Rights Commission, where there's overlapping responsibilities, you know, concerning enforcement of equality law and rights and, you know, the other enforcement bodies at play. So really looking at resourcing the roles and scope of each of those respective bodies.
Ian: Yeah. There's some going to be going back to that fair work agency points at the end that you've mentioned. There's going to be some real important changes here, and we've been advising clients in terms of the new sexual harassment legislation, the duty to protect prevent sexual harassment and the rights of the human equality and human rights committee to commission to bring proceedings on behalf of employees even if they haven't gone to tribunal themselves. And I suppose from an employer's perspective, now from a tribunal risk perspective, they may be looking at it and saying, well, claims can be brought on behalf of by individuals themselves, but also now, you know, by the HRC and potentially in the future by the Fair Work Agency. So they I suppose the employment tribunals are going to be busier than they already are, aren't they?
Rebecca: Yes. Yeah.
Rebecca: And especially with, the intention, I suppose, of changing the jurisdiction, the time limit Wow.
Ian: That's another point. Yeah. That's another point.
Rebecca: As well. I just feel like the tribunals are going to be more inundated than they already are.
Ian: Yeah. Yeah. And, obviously, we're already known to seem quite lengthy, waiting times now for hearing. So, it'd be interesting to keep an eye on that as well. You mentioned, Rebecca, about the consultations.
Ian: What what's happening with those consultations that I think you said they're still ongoing?
Rebecca: Yeah. So, actually, the government published its response to the four key consultations on the 4 March, and one of those being, strengthening statutory sick pay. So, we mentioned earlier that the amendment proposes that sick pay will be at the lower of either the SSP rate or 80% of the individual's average weekly wage.
Rebecca: But despite a number of concerns and objections from employers and businesses during the consultation, the government has not changed its position on making statutory sick pay available from the first day of sickness by removing the current waiting period.
Rebecca: So this is set to go ahead. So, first day of sickness will be covered by SSP by the looks of it, despite a significant amount of concern and objection from employers and businesses.
Rebecca: Then the second, consultation was on collective redundancy remedies and fire and rehire. So again, we mentioned earlier that the government has proposed an amendment to double the maximum protective award from 90 to one 180 days pay for a breach of employers' collective redundancy consultation obligations.
Rebecca: But I think I did briefly mention that it won't press ahead with the idea of introducing interim relief awards for fire and rehire claims.
Rebecca: And for those that that are not aware, interim relief is available in particular types of unfair dismissal claims. So, it requires employers to reinstate dismissed employees or at least to pay them their salary and benefits, until the unfair dismissal hearing takes place. And as we just mentioned, Ian, with significant backlog in, the employment tribunals at the moment, that is a huge, you know, this interim relief thing was it was a huge, imposition really on employers wanting to proceed with dismissals. So that's really notable that that's now been removed.
Rebecca: The other consultation that was going on was about the modern framework for industrial relations.
Rebecca: So, this related to things like trade union recognition, industrial action, access.
Rebecca: And in its response to the consultation, the government has identified some aspects that can be addressed via amendments to the bill and then others that will be the subject of future consultation and presumably future legislation.
Rebecca: So the amendments to the current bill will be, extending existing protections against unfair practices.
Rebecca: So, you know, to improperly influence the outcome during union recognition processes.
Rebecca: I mentioned earlier, allowing digital access to a workplace for collective bargaining purposes as well as the physical access already included.
Rebecca: The notice of industrial action, so this is an a new amendment.
Rebecca: So originally, the bill had proposed to change the notice given to employers from the current 14 days down to 7 days. But it looks like as a result of this consultation, the government has now proposed to amend that to 10 days. So, there has been a slight shift there in the notice period.
Rebecca: And then, finally, following the successful ballot, a union's mandate to take the relevant industrial action, currently lasts for 6 months, but the amendment proposes to increase this to 12 months. So, 12 months to be able to take industrial action after a successful ballot.
Rebecca: And then the final, consultation that we had that that was going on was, application of the bill's zero hours provisions to agency workers.
Rebecca: So, government still intended for this to go ahead with end users usually being responsible for offering guaranteed hours to match the hours worked over a relevant reference period, which is probably going to be 12 weeks, to match with the, you know, agency worker regulations, but with some flexibility in certain circumstances, which has not been set out as yet.
Rebecca: There's going to be joint responsibility for agencies and end users to provide reasonable notice to the worker of shifts and shift changes or cancellations with the agency carrying the burden of compensation payments for short notice changes or cancellations, but, with provision for agencies and end users to obviously agree for recruitment of such compensation costs from the end user if it's their fault, if they've if they've caused the short notice cancellation or change.
Rebecca: And, yeah, just that that confirmation again that the government intends to proceed with extending the zero and low hours provisions to agency workers.
Rebecca: And this this has been, the subject of some concern and, you know, employers and businesses don't seem to be happy about this particular aspect of this, but the government seems to be proceeding with it at the moment. So an awful lot going on there, Ian.
Ian: Yeah. There's all sorts going on, isn't there? There's really there is a lot going on with this, with the Employment Rights Bill and, it's one certainly we'll be we'll be keeping an eye on. And I know that, Weightmans are doing a series, the ERB series, which you can follow if you follow the Weightmans LinkedIn page, and, any further updates will be covered there and also in any future podcasts with us as well. So, keep an eye, an ear out for that, and by subscribing to this podcast, the employment law insights.
Ian: But for now, if you do need any assistance either with, the proposed changes or anything else employment law related, then do contact, me by email. My email address is Ian.pace@weightmans.com or Rebecca, who is at rebecca.cairney@weightmans.com, and our details are also on the site. But for now, thanks so much, Rebecca, for, going through that in such detail and giving us the update.
Rebecca: Yeah. Not a problem at all, Ian. Always happy to help.