The Employment Rights Bill Tracker

The UK’s Employment Rights Bill, described as “the biggest upgrade to workers’ rights in a generation,” was unveiled in October 2024. In December, we provided an overview of its key provisions and their implications for both employers and employees.
 

Following initial consultations, the government introduced over 200 pages of amendments on 14 February 2025. The revised Bill is currently progressing through the House of Lords and is expected to come into force with a staged implementation from the latter part of the year and through 2026.

We are continuing to track the progress of the Bill and, in this article, we explore the key amendments and their potential impact on employers and employees.

Key Changes in the Amended Bill

1. Time Limits for Tribunal Claims

The Bill extends the time limit for bringing employment tribunal claims from three months to six months.

Extending the time limit for bringing employment tribunal claims (discrimination claims in particular) has been discussed for quite some time and this amendment means that that will now happen.  The thinking behind this is to improve access to justice for claimants, particularly those who may find it difficult to bring claims quickly because of their state of health or because they have recently had a baby (for example). 

It also means parties will have longer to resolve disputes before the claimant has to submit a claim.  On the other hand, the extension will mean that employers will be faced with increased uncertainty as to whether a claim will be brought in the event of a dispute and, possibly, an increase in the number of claims brought.    

2. Collective Redundancy Consultation
 

The Bill strengthens the framework for collective redundancy consultation. Under the current law, employers must engage in collective consultation if proposing 20 or more redundancies at “one establishment” within a 90-day period. The original Bill sought to remove the “one establishment” reference, requiring consultation across the entire workforce.

The latest amendments modify this approach, now requiring consultation in either of the following scenarios:

• When 20 or more redundancies occur at a single establishment; or
• When an alternative threshold is met, which will be defined in forthcoming regulations. This threshold is expected to consider redundancies across the entire employing entity, possibly based on a percentage or a higher absolute number.

Additional clarifications to this area include:

• Employers will not be required to consult with all representatives together or reach the same agreement with all affected parties.
• The maximum Protective Award for failing to conduct proper collective consultation will increase from 90 to 180 days’ pay per affected employee, significantly raising the financial risk for non-compliant employers.

The consequences of failing to collectively consult could therefore be crippling for an organisation, a measure which no doubt has been imposed to ensure compliance and in response to the P&O Ferries mass dismissals which took place in 2022.

3. Fire and Rehire
 

Although it was initially expected that the Bill would ban the practice of fire and rehire in its entirety, significant restrictions on the practice will be put in place instead.

Fire and rehire is the practice of effectively forcing changes to employees’ contractual terms, by dismissing them from their old contracts, and seeking to re-engage them on new terms.

Currently, subject to following a fair process, this practice is lawful, but the Bill will make it automatically unfair to dismiss an employee who refuses a contractual change, except in cases where the business is in financial distress and the need to make the change in contractual terms could not be avoided.

Initially, the government considered introducing interim relief as a remedy for breaches of fire-and-rehire obligations. However, the revised Bill confirms that interim relief will not be implemented as a remedy.

Similar to the changes to collective consultation for redundancy, the Bill has doubled the Protective Award in fire and re-hire scenarios too. This means that if an organisation fails to collectively consult with employees that are being dismissed due to not accepting a change in their contractual terms, the effected employees could be awarded up to 180 days’ pay (up from 90) in this scenario.

In addition, a statutory Code of Practice on fire and rehire (“Dismissal and Re-engagement”) was introduced in July 2024 and a 25% uplift on any successful award for unfair dismissal in this scenario can be implemented where an organisation unreasonably fails to follow the Code. The Bill confirms that this 25% uplift can also be applied to a Protective Award, meaning again that the consequences for employers of falling foul of the law will be severe from a financial perspective.

Overall, the changes are likely to mean that it will be significantly more difficult for organisations to change employees’ terms and conditions without their consent. This again reflects the Government’s desire to address the imbalance of power in the context of employment.

4. Zero-Hours Contracts and Agency Workers
 

One of the most significant changes to the Bill is the extension of the right to guaranteed working hours for those on zero-hours or low-hours contracts to agency workers.

Initially, the Bill excluded agency workers from provisions requiring employers to offer guaranteed hours to qualifying workers based on hours worked over a reference period (to be specified in regulations), provide reasonable notice for shifts and to compensate workers for short-notice cancellations. However, the revised Bill confirms that these protections will now extend to agency workers.

This change aims to prevent employers from circumventing the new rules by hiring agency staff instead of directly employed workers. The government has acknowledged that implementation details will vary depending on the nature of the employment relationship.

Key clarifications include:

• The end hirer must offer guaranteed hours to agency workers.
• Both the employment agency and the end hirer are responsible for providing reasonable notice of shifts.
• Employment agencies must compensate agency workers for short-notice cancellations or reductions in hours.
• For agency arrangements made more than two months before the Bill’s enactment, employment agencies will be allowed to recover certain costs from the end hirer. For later arrangements, cost-recovery terms will be subject to negotiation between the employment agency and the end hirer.

Additionally, the amendments clarify the Bill’s obligation for employers to “make work available.”  Employers will be required to provide a defined number of hours and workers will be obliged to fulfil those agreed hours.

Finally, an amendment to the Bill also allows parties to opt out of guaranteed hours, reasonable notice of shifts and compensation for cancelled, curtailed or moved shifts for zero hours, low hours and agency workers through a relevant collective agreement.

According to the Living Wage Foundation, these changes are expected to save those in the most deprived areas of the country up to £600 per year in lost income due to insecure work. These changes are no doubt intended to promote the government’s aim for the Bill to tackle “low pay, poor working conditions and poor job security” which it believes is “holding back” the UK economy.

5. Statutory Sick Pay
 

The Bill will scrap the three-day waiting period for Statutory Sick Pay (SSP), making it payable from the first day of sickness. A new amendment introduces additional provisions for those earning below the lower earnings limit, granting them the right to sick pay at 80% of their average weekly earnings. As a result, all employees will be entitled to either the lower of the SSP weekly flat rate or 80% of their average earnings from the first day of sickness.

This change could put more financial pressure on employers, as sick pay will be due from day one of absence and may result in a shift in focus towards stricter management of short-term repeated absences.

6.  Trade Union Reform

The government has reaffirmed its commitment to removing unnecessary restrictions on trade union activity. The primary reforms include:

• Repealing the provisions relating to minimum service levels introduced by the previous government.
• Introducing a duty for employers to inform their employees about their right to trade union membership.
• Providing digital right of access to the workplace for trade unions for collective bargaining purposes. 
• Reducing the strike notice period from 14 to 10 days.   
• Extending the expiry period for industrial action mandates from 6 to 12 months. 
• Reducing the information required to be provided in ballot notices. 
• Reducing the information unions are required to provide employers in notices of industrial action.  
• Introducing e-balloting.
• Streamlining the trade union recognition process, including strengthening protections against unfair practices.

7. Fair Work Agency
 

The Bill establishes a new enforcement body, the Fair Work Agency (FWA), which will consolidate and expand existing regulatory oversight. This agency will take on enforcement responsibilities related to minimum wage compliance, statutory sick pay and labour exploitation, while also introducing new oversight of holiday pay enforcement. Key amendments have further expanded its authority:

Employers will have to maintain thorough records demonstrating that workers are receiving their full holiday entitlement.

The FWA will have the power to issue underpayment notices to employers found in breach of statutory pay obligations, such as holiday pay or SSP. These notices will require payment within 28 days and include a 200% penalty of the unpaid amount, payable to the Secretary of State.

If an employee has a legitimate claim but does not pursue it, the FWA will have the authority to bring a claim on their behalf.

Employers who fail to comply with statutory requirements will be liable for costs incurred by the government in enforcing these obligations.

Significantly, the FWA will have the ability to bring employment tribunal proceedings on behalf of workers who have the right to bring a claim but are not going to do so (perhaps because they do not have the resources to). 

The Government will continue to consult on significant aspects of the Bill throughout the year and it is essential for employers, employees and unions to actively participate in this process to help shape effective legislation. We will continue to provide updates as the Bill progresses through Parliament.

further information 

If you have any questions, please contact our Employment team.

 

About the Authors

Georgia is an Associate in the employment team and has versatile experience dealing with a wide range of employment law matters.

Zoe is a trainee solicitor and is currently in her fourth seat with the Employment team.