Comments

These latest amendments to the Employment Rights Bill represent important developments. In the agency worker sector, they will give some ability to employers to limit the pay offered under a GHO to the levels pay of comparable direct hires. This may mitigate slightly the potential costs of having to take on agency workers on a permanent basis under the GHO regime.

In relation to fire and rehire, the amendments mean that not all variations of contract will be in scope of  the rules on automatic unfair dismissal. However, the most significant types of variations, such as to pay and hours, remain in scope.

Non-disclosure agreements (NDAs) have long been in the crosshairs when it comes to allegations of discrimination or harassment. There are differing views on whether NDAs are in fact beneficial to some individuals as a negotiating tool; however, the overall view, which the government is pursuing, is that such agreements are harmful to both individuals and society in general.

Finally, the proposed new bereavement leave for pregnancy loss continues the trend of giving minimum statutory rights to time off in situations where many employers would already voluntarily give such time off.

We will continue to report on significant amendments to the Bill as they arise. For the latest timescales on the Bill and associated consultations, see here: Updated timescales for Employment Rights Bill.

In more detail

The Employment Rights Bill contains several key measures from the Labour party's election manifesto and later King's Speech. We summarised the Bill at the time it was published in October 2024 here: Employment Rights Bill key provisions. In March 2025, as the Bill completed its passage through the House of Commons, several important amendments were published, as summarised here: Government publishes consultation outcomes and amendments to Employment Rights Bill.

The Bill has since been working its way through the House of Lords and has reached the final stages (Report stage). The government has put forward further amendments, which are likely to be adopted. Once the Bill has been passed by the Lords, it will return to the Commons for further consideration.

Peers from other political parties have also proposed amendments, but these are unlikely to make it into the final version of the Bill. This briefing focuses on the recent government amendments, which are as follow:

Guaranteed hours offers (GHOs)

The Bill will create a framework for a right to a GHO for qualifying workers on zero hours contracts and qualifying agency workers.

A GHO to an agency worker, if accepted, would make the worker a direct hire of the employer. The recent amendments now contain four alternate conditions regarding the level of pay the employer would have to offer. It is often the case that agency workers are paid more than direct hires. The new framework would allow an employer to offer pay at a level that is no less favourable than the pay it offers to comparable direct hires – so potentially a pay drop for the individual concerned. Where there are several comparators with different pay levels, the employer will have to justify its decision in writing if it offers pay at one of the lower comparator pay levels. The Bill alternatively allows the employer to offer pay measured against the pay that the agency worker received during their agency assignment. If that pay level fluctuated, the employer will have to justify in writing any offer that is below the most favourable pay levels that the worker received.

The Bill will allow the government to specify circumstances in which the right to a GHO will not arise. The recent amendments to the Bill clarify that the government will have to conduct a balancing act in considering any such exemptions, but a balancing act that is weighted in workers' favour. In short, an exemption should only be made if the right to a GHO in that circumstance would have a significant adverse effect on employers who are dealing with exceptional circumstances.

Much of the detail of the right to a GHO will need to be confirmed in further regulations and there will be consultation on the topic this autumn. The government does not anticipate the right coming into force before 2027.

At the time of writing, the Lords have approved a non-government amendment to turn this right into a right to request guaranteed hours, rather than an obligation on the employer to offer them. However, the government did not support this and it is therefore unlikely that it will be approved by the Commons.

Fire and rehire

Under the Bill, a dismissal will be automatically unfair where the reason or principal reason for dismissal  results from the employee's refusal to agree to a variation of contract. However, the recent amendments now indicate that only certain types of contract variation ("a restricted variation") will trigger these automatic unfair dismissal rules, although it remains a very broad range:

• A reduction to or removal of an element of pay
• Varying a measure of work that links to pay
• Pension rights
• Hours of work
• Timing or duration of shifts (subject to conditions yet to be established)
• Reduction in entitlement to time off
• A clause that purports to allow the employer to make any of the above types of variation

The government will be able to add to this list.

It remains the case that there will only be a limited exception to this protection. By way of reminder, this is where:

• The employer can show that the restricted variation will eliminate, prevent or significantly mitigate the effect of any financial difficulties which at the time of dismissal were affecting, or were very likely in the immediate future, to affect the ability to carry on the business as a going concern; and
• The employer could not have reasonably avoided the need to make the restricted variation.

Even if that exception applies, meaning that it would not be automatically unfair to dismiss the employee for failing to agree to the restricted variation, the employee could still claim ordinary unfair dismissal claim. A tribunal would then be required to consider factors such as the reason for the variation, whether the employer consulted with the individual, whether it consulted with a recognised trade union (or, if there is no recognised union and if applicable, someone else with authority to represent the employee) and whether any consideration was offered to the employee in exchange for the restricted variation.

In relation to non-restricted variations of contract, these could also give rise to an ordinary unfair dismissal claim, and the tribunal would need to consider the same list of factors in determining fairness.

The recent amendments make it clear that it will also be automatically unfair to dismiss an employee who refuses to switch to a non-employment model of working (e.g. an independent contractor model) to do substantially the same work, or to replace them with a non-employee to do substantially the same work. The financial difficulties exception mentioned above will also apply here, as will the list of factors to be considered in an ordinary unfair dismissal claim.

Finally, the amendments also make specific provisions for public authorities, which we do not cover here.

NDAs

A government amendment would insert a new section 202A into the Employment Rights Act 1996. This would make void any provision in a contract between an employer and a worker (with additional powers to extend this to others such as trainees, contractors, those on work experience and so on by regulations) which purports to prevent an individual from making allegations or disclosures about relevant discrimination or harassment. This includes direct and indirect discrimination as well as discrimination arising from disability, but excludes failures to make reasonable adjustments.

Although allegations of victimisation do not expressly feature in the definitions of relevant harassment or discrimination, the employer's response to the making of the allegation or disclosure will fall within the scope of the ban.  We believe that this would in effect capture allegations of victimisation, but clarification would be welcome. It would also mean that an employer could not use a NDA to prevent the employee from revealing that the employer had ignored harassment complaints (whether from the employee or other workers).

The section would cover a provision in any type of agreement, including most pertinently settlement agreements, although there is further provision to make regulations which would exclude certain types of (unspecified) agreements.

Bereavement leave for pregnancy loss

The original draft of the Bill expanded the right to bereavement leave to a wider category of specified relationships. Currently, bereavement leave is only available to parents whose child dies. The latest amendments to the Bill include an additional expansion to enable the Secretary of State to make regulations covering bereavement leave related to pregnancy loss. This is defined, broadly, as a miscarriage before 24 weeks of pregnancy or the failure of an embryo to become implanted after IVF treatment. The right will be given to an employee who suffers a pregnancy loss, or an employee who has a specified relationship with a person who suffers pregnancy loss, or a child who had been expected to be born. The right will be for a minimum of one week’s leave, which can be taken within 56 days of the death.