Government tables key amendments to the Employment Rights Bill

The Government has proposed a series of significant amendments to the Employment Rights Bill, which will be considered in Parliament. These amendments follow responses to several consultations on employment protections, agency work, collective redundancies, trade union legislation, and statutory sick pay. They also include measures to regulate the umbrella company market, an issue previously left unaddressed. Below, we examine the key changes and their implications.

Guaranteed hours for agency workers

A major focus of the amendments is addressing zero-hours contracts and the lack of stability for agency workers. Under the new provisions, agency workers will gain the right to be offered guaranteed hours based on their working patterns over a set reference (expected to be 12 weeks). Crucially, responsibility for offering these guaranteed hours will rest primarily with the end user; the business that benefits from the worker’s services. However, the legislation will allow flexibility for agencies or other intermediaries to take on this obligation in certain circumstances, which will be detailed in secondary legislation.

Additional protections include:

• a requirement for reasonable notice of shift allocations, cancellations or changes.
• a duty on agencies to compensate workers for short notice shift cancellations, though agencies may negotiate terms with the end user to recover costs where the end user was responsible for the change.

Strengthened remedies for collective redundancy breaches

The bill will also double the maximum period of the protective award for failure to engage in proper collective consultation, increasing it from 90 to 180 days’ pay per affected employee. This change underscores the Government’s commitment to strengthening the remedies against abuse of rules on collective redundancy and fire and rehire. The Government has said the intention behind this suggested amendment is to enhance the deterrent against employers deliberately ignoring their collective consultation obligations and to ensure it is not financially beneficial to do so. However, the amends stop short of introducing interim relief, which would have provided continued pay to employees whilst they are pursuing claims for protective awards or unfair dismissal in fire and rehire situations.

Trade union and industrial relations reforms

The Government has introduced several amendments aimed at modernising industrial relations and enhancing trade union rights. These include:

• stronger protections against unfair practises during statutory recognition procedures
• a longer mandate for industrial action, increasing from 6 to 12 months before a fresh ballot is required
• simplified balloting procedures for industrial action with further consultation planned on e-balloting
• digital access rights for trade unions allowing unions to communicate with employees electronically for collective bargaining purposes, in addition to existing physical access rights.

Changes to Statutory Sick Pay eligibility

A notable amendment concerns SSP. Currently, employees earning below a certain threshold do not qualify for SSP. The Bill amendment will remove this lower earnings limit, making all employees eligible. However rather than receiving the full statutory rates, employees will be entitled to either 80% of their average weekly earnings or the standard SSP rates, whichever is lower. The amendment allows broader coverage while maintaining a cost control mechanism for employers.

Regulating the umbrella company market

The regulation of umbrella companies has long been an area of concern, with previous calls for oversight largely unaddressed. The Bill now includes provisions enabling regulation of umbrella companies for employment rights purposes. The Government has committed to further consultation on ensuring that workers employed through umbrella companies receive comparable rights and protections to those engaged directly by employment businesses.

Appeals to the Government from businesses to water down its Employment Rights Bill seem to have gone almost completely unheard and instead, these amendments signal a clear shift towards stronger worker protections, particularly for agency workers and those affected by collective consultation. The expansion of trade union rights and the move to regulate umbrella companies also reflect a broader effort to address long standing issues that workers in the UK labour market have faced. However, some gaps remain. The abovementioned absence of interim relief means that in practise many may still face financial hardship while awaiting tribunal outcomes. Similarly whilst the increase in the protective award for collective consultation failures is significant, it remains to be seen whether it will be an effective deterrent.

Much of the practical detail, including how the guaranteed hours requirement for agency workers will be enforced, will be determined through secondary legislation, meaning further clarity will be needed before businesses can fully assess their compliance obligations.

Please do not hesitate to contact a member of our employment team who will be happy to help.