Comment

The ERB is a lengthy piece of legislation covering a huge range of employment law. It will continue to be subject to multiple consultations and revisions, and many of its measures will require secondary legislation to flesh out the detail. Most of the measures are not due to be brought into force before 2026. For information on the originally proposed measures, see Employment Rights Bill key provisions.

The recently published amendments do not alter the general policy intentions, with one important exception: collective redundancy consultation obligations. It was originally proposed that the current threshold requirement that dismissals took place at the same establishment of the employer would be removed altogether. The ERB amendments now retain the establishment test, with an important exception. The new provisions would now require employers to notify the Secretary of State, and consult with representatives of affected employees, where either (a) 20 or more dismissals are contemplated at a single establishment, or (b) where an employer reaches a dismissals threshold (the level of which is yet to be specified) across its entire workforce, without reference to establishments. This modification will likely remove some redundancy scenarios from the scope of collective consultation, but the all-important question is, of course, what the workforce dismissals threshold will be. Practically speaking, employers will still need to put ongoing monitoring processes in place to keep track of all dismissals across their entire workforce.

This round of ERB amendments also begins the process of fleshing out how the new concept of guaranteed hours offers will be extended to agency workers, as well as the rights to reasonable notice of shifts and shift cancellations or changes. There are also notable developments in relation to industrial relations (e.g., trade union rights of access and industrial action ballot and notification requirements), holiday records, powers for the proposed Fair Work Agency, statutory sick pay (SSP) changes and regulation of umbrella companies.

There are other critical aspects of the ERB which are still subject to consultation and further detail. These include making protection from unfair dismissal a day-one right (in particular how the exemptions for probationary periods will work); the thresholds for the obligation to make a guaranteed hours offer to zero hours or agency workers; extended protections from dismissal for pregnant workers (although the amendments do create a power to make regulations around procedural rules for such dismissals).

In more detail

Collective redundancy consultation, compensation and fire and rehire rules

The ERB as introduced was to remove the concept of an establishment when calculating the number of employees being made redundant and whether employers are required to inform and consult employee representatives (and notify the Secretary of State) before any dismissals are made. A government amendment to the ERB would now introduce a test of where 20 or more employees are to be dismissed at one establishment, or where a threshold number of employees is reached, in a case where employees are being made redundant at more than one establishment. The threshold number is not stated, but a new section 195A in TULRCA 1992 would give power to the Secretary of State to prescribe a number. This could be calculated by numbers of employees or as, for example, a certain percentage of the workforce.

Employment tribunals have the power to make a protective award against employers who fail to comply with statutory information and consultation procedures when they make more than 20 employees redundant in any 90-day period. This protective award will be increased from the current maximum of 90 days' pay to 180 days. The government rejected arguments that the award should be uncapped, and confirms that tribunals will still have discretion to reduce the payment to reflect the level of breach.

Proposals that interim relief (an interim relief order requires the employer to continue to pay the employee's salary pending a tribunal hearing for certain types of claims, including those relating to trade union membership and whistleblowing) be extended to cover collective redundancy consultation and 'fire and rehire' (dismissal and reengagement) claims have been dropped. While some respondents were in favour, concerns raised included the impact on the tribunal system.

Guidance will be published to help employers understand their obligations to consult with employees and to enable them to comply.

Modern framework for industrial relations

The ERB already contains significant changes to industrial relations law in the UK. The government has now proposed further legislative changes to "reset and modernise" the industrial relations framework. The changes include:

• The right for trade unions to physically access the workplace set out in the current draft of the ERB will be extended to include a right of digital access. Digital access will be defined in secondary legislation following consultation.
• Penalties may be imposed by the CAC for non-compliance with the new rights of access, which will become effective via secondary legislation following further consultation.
• The strike mandate period will be increased to 12 months (from the current six months.)
• Notice of industrial action that must be given by the trade union to the employer will be reduced to 10 days (from the current 14 days.)
• The current requirement for there to be a 50% industrial action ballot turn out will be repealed at a date to be specified and will likely align with the roll out of e-balloting.
• A statutory recognition application made by an independent trade union will be allowed to continue even if the employer subsequently agrees a voluntary recognition agreement with a non-independent union after the independent union has made its application.
• Most of the proposals to combat "unfair practices" during the trade union recognition process will proceed including an extension of the protected period, a block on employers "mass recruiting" into the bargaining unit to dilute the level of trade union membership, and an extension of the time limit for bringing an unfair-practices claim.
• Introduction of a 20-working days window for the employer and trade union to negotiate access arrangements during the statutory recognition process with powers for the CAC to adjudicate on any breach of those arrangements.
• Simplification of the information that needs to be provided in ballot and industrial action notices.

Zero hours workers protections for agency workers

The ERB will create a framework for a right to a guaranteed hours offer (GHO) for workers on zero hours contracts, as well as a right to reasonable notice of shifts changes. Much of the detail of these rights will need to be confirmed in further regulations.

These rights will be extended to agency workers too, and the government has consulted on certain issues specific to agency arrangements. The upshot is as follows:

• The obligation to offer a GHO will fall on end hirers. This will effectively be a temp to perm offer. The thresholds and reference periods for triggering this obligation (whether for agency workers or direct hires) will be the subject of further consultation.
• The consultation response states that there will be no changes to existing rules on transfer fees or extended hire periods. They will therefore also apply to GHOs (although how extended hire periods will work in practice in relation to GHOs is not currently addressed in the draft legislation).
• Both agencies and end hirers will share responsibility for providing reasonable notice of shift changes or cancellations to the agency worker.
  • However, liability for any statutory payments for short notice will fall on the agency.
  • It will be left to agencies and end hirers to agree whether the agency can recoup these amounts from the end hirer. There will be statutory transitional provisions enabling this recoupment in pre-existing arrangements, in recognition of the fact that those arrangements won't have addressed this particular issue.
  • As for how agencies and end hirers communicate between themselves, this will also be left to them to agree.

Zero hours and shift-related protections generally

Under the latest amendments, it will be possible to expressly exclude, via collective agreement, the rights to receive a GHO and reasonable notice of shifts (and any cancellation of or changes to shifts). This applies to both direct hires and agency workers. In short, the collective agreement would have to be negotiated between an independent trade union and the employer (or the agency), and be incorporated into the worker's individual contract.

Holiday records

Employers will be required to keep records, for six years, to evidence compliance with workers' statutory rights to paid annual leave.

Fair Work Agency (FWA)

As previously announced, the government intends to create a Fair Work Agency, bringing together existing agencies and conferring new enforcement powers too. (See Factsheet: Fair Work Agency in the ERB.)

The FWA is yet to be created, but the ERB has started this process.

The latest amendments to the ERB will mean that, in addition to previously listed matters, the FWA will also:

• Have enforcement powers in relation to the new requirement to keep holiday records (see above).
• Be able to bring a worker's claim in the place of the worker, if they decided not to pursue the claim. Practically speaking, it's unclear how a claim could progress if the worker were not actively engaged in the process, as they would usually need to give evidence.
• Be able to give legal assistance in civil proceedings.

Statutory sick pay

As described in our original article, entitlement to SSP is due to be widened, through removing waiting days and earnings thresholds.

Following consultation, it is now proposed that the weekly rate of SSP in Great Britain will be the lower of GBP 118.75 and 80% of an employee's weekly earnings. GBP 118.75 is the new flat rate for SSP that is expected to come into effect on 6 April 2025, after annual uprating.

Umbrella companies

Broadly speaking, umbrella companies are to be brought within the scope of the same rules that apply to employment businesses. Separately, as announced at the Autumn Budget 2024, the government intends to bring forward legislation to change who has responsibility to account for PAYE where an umbrella company is used: responsibility will switch to the recruitment agency that supplies the worker to the end client. Where there is no agency involved, this responsibility will sit with the end client.