The Government has unveiled amendments to its proposed Employment Rights Bill (ERB), which it predicts will boost productivity and drive economic growth.

The amendments respond to contributions made by businesses and trade unions following consultation on the original ERB, which was announced in October 2024.

The amended ERB proposes further significant changes to the employment law landscape, at a time when employers are already grappling with increased costs imposed by changes to national insurance contributions and the national minimum wage.

With full implementation likely by mid-to-late 2026, now is the time to plan. Despite these most recent amendments, the most significant change which will be introduced by the ERB remains day-one unfair dismissal rights and employers should get ahead by reviewing their policies and practices and ensuring managers are trained on how to conduct fair processes.

For expert guidance, contact the Employment team on EmploymentManchester@h-f.co.uk.

With the changes on the horizon, here’s what employers need to prepare for:

1. Guaranteed hours for zero hours and agency workers

The ERB aims to curb ‘exploitative’ zero and low hours contracts and end the perceived ‘one-sided’ flexibility of such contracts by introducing the right for eligible zero and low hour workers to:

•  be offered guaranteed hours matching the hours they regularly work.
•  receive reasonable notice of shift changes or compensation for shifts cancelled at short notice.

In response to trade union concerns that employers would hire agency staff to avoid these protections, amendments to the ERB will now extend these rights to agency workers. Employers and unions can also negotiate alternatives, provided they’re part of worker contracts.

Responsibility for complying in relation to agency workers will sit with both the agency and the end hirer and it remains unclear what would be considered ‘reasonable’ or ‘short’ notice, or over what period ‘regular hours’ will be calculated.

2. Fire and rehire

The ERB makes ‘fire and rehire’ dismissals automatically unfair except in very limited circumstances where the employer faces severe financial difficulties.

However, an amendment has removed the right of employees affected by ‘fire and rehire’ to claim interim relief.

3. Statutory sick pay (‘SSP’) for low earners

Under the ERB, SSP will be payable from the first day of sickness absence. SSP will be further enhanced by an amendment, which will extend the right to receive SSP to those who earn below the lower earnings limit. All employees will therefore receive either the standard rate of SSP or 80% of their average earnings, whichever is lower.

4. Collective redundancy consultation changes

The ERB originally proposed that collective consultation obligations would arise whenever a business proposed to make 20 or more redundancies within a 90-day period, regardless of whether or not those redundancies were to take place at one establishment.

This has been watered down by an amendment, so that collective consultation will be triggered when 20 or more redundancies are proposed at one establishment or where another (yet to be confirmed) threshold is met. The ‘other threshold’ will likely relate to a particular number and/or percentage of employees across the whole business.

In other amendments, employers failing to consult could face doubled protective awards (180 days instead of 90), but dismissed employees won’t be able to claim interim relief.

5. Strengthened Fair Work Agency (‘FWA’)

The powers of the new employment rights enforcement agency, the FWA, will now be wider than the original ERB proposed, and will be able to bring claims on behalf of employees who have not brought claims themselves.

6. Other changes

The amended ERB also contains other key changes, such as in relation to the recognition and powers of trade unions, as well as provisions to regulate ‘umbrella companies’ and prevent their perceived use in diluting employee rights.

The amendments also provide further details on the provisions designed to prevent the dismissal of pregnant employees or those on or returning from maternity leave and a new entitlement to miscarriage bereavement leave will be introduced. The much-touted ‘right to disconnect’ has been dropped.

For expert guidance, contact the Employment team on EmploymentManchester@h-f.co.uk.