Employment Rights Bill – consultation responses and latest amendments

The Government has published its responses to the five consultation papers on various key provisions in the Employment Rights Bill, setting out its conclusions and proposed amendments to the Bill.

The Government’s press release summarises the main amendments to the Bill following these consultations. Further details of each consultation response are set out below.

In addition, a tabled list of amendments to the Bill has also now been published, running to a mammoth 215 pages. Many of these amendments are Government amendments resulting from the consultations as detailed below and additional amendments introduced following the Committee stage, as well as technical or consequential amendments.

Statutory sick pay (SSP)

The Government’s Plan to Make Work Pay committed to extending SSP to those earning below the Lower Earnings Limit (currently £123 per week), who are not currently entitled to receive it.

The Government consultation response confirms that SSP will be payable at the rate of 80% of an individual’s weekly earnings, or at the applicable flat rate of SSP, whichever is the lower. The response states: “The government is confident that an 80% rate strikes the right balance between providing financial security to employees who need it, whilst limiting additional costs to businesses”. 

It is estimated that 1.3 million employees will gain a new entitlement to receive SSP. However, it means that some employees who earn just above the Lower Earnings Limit will receive a slightly lower level of SSP than at present under the current system, as their 80% rate of SSP will be lower than the weekly flat rate of SSP. The Government acknowledges this disadvantage but considers that it will be offset by the removal of the current three-day ‘waiting period’, meaning that SSP will be payable from the first day of a period of sickness absence.

Note that SSP will rise from the current rate of £116.75 per week to £118.75 per week in April. Based on the new rates from April, an employee would need to be earning approximately £149 per week or above to be entitled to receive the flat rate of SSP.

The Government has confirmed that it has no plans to reduce the current length of self-certification (7 days) for periods of sickness absence, or to change the current period of entitlement of 28 weeks.

Collective redundancy and ‘fire and rehire’

The Government’s consultation response confirms that the protective award for an employer’s failure to comply with its collective consultation obligations (which apply when proposing redundancies of 20+ employees) will increase from a maximum of 90 days’ (uncapped) pay to a maximum of 180 days’ pay. Employment tribunals will retain the discretion to vary the length of the protected period as they consider just and equitable in all the circumstances, having regard to the seriousness of the employer’s actions as well as any mitigating factors.

An important amendment to the Bill means that the current threshold of 20+ proposed redundancies ‘at one establishment’ for the collective consultation obligations to apply will be retained. The Bill had originally been drafted to remove the ‘at one establishment’ requirement. Instead, separate Regulations can set a new threshold (of not less than 20) for the obligations to apply if redundancies are proposed across multiple ‘establishments’. This is potentially good news for large employers with multiple sites who may otherwise have been caught by the collective consultation obligations.

The consultation response confirms that the Government will not be taking forward its proposal to make interim relief available in claims for a protective award and/or claims for automatic unfair dismissal due to ‘fire and rehire’. This is on the basis that it would place an undue burden both on businesses and the employment tribunals.

The Government is planning to issue further guidance to employers on the consultation process for collective redundancies “in due course”. It will also update the current Code of Practice on Dismissal and Re-engagement to reflect the changes under the Bill, and it plans to gather further views on strengthening the collective redundancy framework during 2025.

Industrial relations

The Government’s consultation response confirms the amendments that will be made to the Bill in order to “strengthen the voice of working people” and create a modern framework for industrial relations.

Amendments to the Bill will introduce the following changes:

• A streamlined process for trade union recognition.
• Strengthened protections against unfair practices by employers during the statutory recognition process.
• New workplace access provisions to cover digital access, and a fast-track route for trade unions to enter into an access agreement with an employer, with appropriate penalties for non-compliance.
• Abolishing the current 10-year requirement for unions to ballot members on the maintenance of a political fund.
• Simplifying the current information requirements for industrial action ballots and notice to employers, and a 10-day notice period for industrial action (rather than 7 days as currently provided in the Bill). The current minimum notice period is 14 days.
• Making balloting more accessible by introducing digital e-balloting.
• Extending the expiry of mandates for industrial action from 6 to 12 months.

Once the Bill has been granted Royal Assent, there will be further consultations required on various of these measures before they take effect, including access arrangements, strengthened protections for trade union representatives and members and balloting (including e-balloting) arrangements.

Guaranteed hours for agency workers

The Bill introduces a new right for zero and low-hours workers to be offered a guaranteed-hours contract, reflecting the hours qualifying workers have worked during a (likely) 12-week reference period.

Note that an important proposed Government amendment to the Bill provides that under the terms of a collective agreement, employers will have the ability to opt out of the new duty to offer workers a guaranteed hours contract.

The Government has consulted on how to extend this right to agency workers. In its consultation response, it confirms that the Bill will be amended to allow the Government to extend the right to a guaranteed hours contract to agency workers, alongside the right to be given ‘reasonable notice’ of shifts and to receive a payment when shifts are cancelled, curtailed or moved at short notice.

The Bill will provide that where a qualifying agency worker is entitled to a guaranteed hours contract offer it will be the responsibility of the end hirer to make the offer, although separate regulations may also place obligations on agencies or other entities in certain circumstances. Where work is genuinely temporary, the end hirer will be able to offer temporary contracts. An agency worker will be under no obligation to accept the offer of a guaranteed hours contract if they want to remain on their existing working arrangement.

Responsibility for providing a qualifying agency worker with reasonable notice of shifts will be placed on both the employment agency and the end hirer. Any payments for short notice cancellation or curtailment of shifts will be the responsibility of the employment agency, but they will have the right to recoup these costs under pre-existing arrangements with hirers.

Much of the technical detail of these new rights will be set out in separate regulations, and the Government has committed to engage with employer organisations, the recruitment sector and trade unions in developing these provisions. It will also produce guidance to assist workers, agencies and hirers to understand the new rights before they come into force.

Umbrella companies

Further amendments to the Bill will apply to umbrella companies. The Government’s consultation response confirms that these amendments will provide for such companies to be regulated and brought within the remit of the Employment Agency Standards Inspectorate. The intention is that workers can access comparable rights and protections when working though an umbrella company as they would when taken on directly by a recruitment agency.

Next steps

An updated copy of the Employment Rights Bill is expected to be published shortly, in advance of the ‘report stage’ on 11 March. This is the final stage in the Commons at which the Bill is debated prior to the third reading, before it then moves across to the House of Lords.

Some of the tabled amendments to the Bill are unlikely to be passed at the third reading, as they are not Government-backed amendments. This includes the introduction of a new right to statutory leave for domestic abuse victims and a duty for employers to publish a domestic abuse policy, a right to be paid during a period of statutory carer’s leave and a new right to ‘protected paternity or parental partner leave’.  

Note, however, that as reported in the Guardian earlier this week, a proposed amendment to extend parental bereavement leave to parents who experience a pregnancy loss prior to 24 weeks is likely to be voted through.