Following a round of consultations, the government has published its response, announcing a series of amendments to the Employment Rights Bill.
Amendments to Employment Rights Bill
The key changes to the Bill include:
Statutory Sick Pay (SSP)
Eligibility for SSP has been expanded to include approximately 1.3 million low-wage workers earning less than £123 per week. These employees will now receive 80% of their average weekly earnings or the standard SSP rate (set to rise to £118.75 per week from April 2025), whichever is lower.
SSP will also be payable from the first day of sickness, eliminating the previous waiting period.
Zero-hours contracts & agency workers
The bill aims to curb exploitative zero-hours contracts by granting employees the right to a guaranteed hours contract if they have worked regular hours over a 12-week period. This right has been extended to agency workers, ensuring they receive reasonable notice of shifts and compensation for cancellations or changes made on short notice.
Fire and rehire penalties
The practice of dismissing employees only to rehire them under less favorable terms, known as ‘fire and rehire,’ will be prohibited. Employers failing to properly consult workers before making such changes currently face penalties equivalent to 90 days’ pay; this will be doubled to 180 days under the new amendments.
Trade Union rights
The notice period required for industrial action has been reduced from 14 to 10 days. Additionally, the validity period for a strike mandate has been extended from six months to one year, facilitating longer periods of industrial action.
New bereavement leave for miscarriage
Parents experiencing a miscarriage before 24 weeks of pregnancy will be entitled to two weeks of bereavement leave.
Omissions
Despite discussions, the amendments do not include provisions granting employees the right to disconnect from work communications outside of working hours. This omission suggests that, for now, employers are not legally required to implement policies allowing employees to disengage from work-related communications during their personal time.
Next steps and timelines for enactment
The Employment Rights Bill, incorporating these amendments, is scheduled for the Report Stage in the House of Commons next week. Following this, it will proceed to the House of Lords for further scrutiny. If approved, the bill is expected to receive Royal Assent later this year, with the provisions likely coming into force in 2026.
Impact on employers
Given the extent of the changes and that they may potentially take effect in the next 12 months, employers are advised to take action now to understand the implications on their organisation and carry out any necessary measures to comply with the reforms.
Assess and revise existing employment policies to align with the new rules, including the revised SSP eligibility criteria, zero-hours contract regulations and anti ‘fire and rehire’ measures. Grievance and disciplinary procedures may also need to be updated to reflect these changes. Employment contracts, especially for agency workers, will also need to comply with the new requirements.
It may be advisable to provide appropriate training sessions for HR personnel and managers to familiarise them with the new regulations, while also communicating policy changes to your workforce.
In financial terms, extending SSP to more employees and from the first day of illness may increase payroll expenses, while higher penalties for ‘fire and rehire’ practices could lead to substantial costs if proper consultation procedures are not followed.
The requirement to offer guaranteed hours contracts to eligible employees and agency workers may necessitate changes in workforce planning and scheduling. Complying with new notice periods and compensation for shift changes is likely to require more meticulous management.
Enhanced trade union rights could potentially lead to more frequent and prolonged industrial action, necessitating proactive engagement with unions and employees to address concerns before they escalate.
Need assistance?
As the provisions of the Employment Rights Bill are finalised, employers should review their HR and employment documentation – including contracts and policies – to ensure compliance with the new requirements.
For advice on how to prepare your organisation for the changes ahead, contact us.
The government’s full response, dated 4 March 2025, can be accessed here.
Author
Founder and Managing Director Anne Morris is a fully qualified solicitor and trusted adviser to large corporates through to SMEs, providing strategic immigration and global mobility advice to support employers with UK operations to meet their workforce needs through corporate immigration.
She is a recognised by Legal 500 and Chambers as a legal expert and delivers Board-level advice on business migration and compliance risk management as well as overseeing the firm’s development of new client propositions and delivery of cost and time efficient processing of applications.
Anne is an active public speaker, immigration commentator, and immigration policy contributor and regularly hosts training sessions for employers and HR professionals
