The Employment Rights Bill (the Bill) is gathering momentum! It is due to complete its report stage and third reading in the House of Commons on 11 and 12 March, before continuing its passage through the House of Lords.
On 4 March the government tabled a large number of amendments to the Bill, as well as publishing the responses to four consultations published last autumn. The consultations sought views on the application of zero hours contracts to agency workers; collective redundancy and fire and rehire; creating a modern framework for industrial relations; and strengthening statutory sick pay. This bulletin focuses on the consultation responses and the implication of these on the Bill.
Agency workers and zero hours
The government has confirmed that the new law on zero hours contracts will apply to agency workers to "ensure that agency work doesn't become a loophole in our plans to end exploitative zero hours contracts". Under the Bill workers on zero hours will have the right to be offered guaranteed hours as well as the right to receive reasonable notice of shifts, and changes affecting shifts. They will also be entitled to payments for any shifts that are cancelled, curtailed or moved at short notice.
The government notes that there was no consensus in response to some of the questions asked in the consultation (perhaps this doesn't come as a surprise following the conflicting responses from the survey we sent out last year asking for your views!), and concludes that the need for as much clarity as possible for hirers, agencies and agency workers is needed. It commits to continue working closely with hirers, agencies and agency workers on the detail of secondary legislation.
The Bill will be amended so that hirers, agencies and agency workers are clear where responsibilities lie in relation to the new rights, but the government response notes that many of the key parameters underpinning the new rights will be set in regulations. It will consult on these regulations.
It has tabled the following amendments to the Bill:
- Where a qualifying agency worker is entitled to a guaranteed hours offer it will be the responsibility of the end hirer to make that offer (there will be a provision enabling regulations to place obligations on agencies instead in certain scenarios).
- The responsibility for providing a qualifying agency worker with reasonable notice of shifts will be that of both the agency and the end hirer.
- The responsibility for paying any short notice cancellation or curtailment payments to agency workers will be placed on employment agencies.
- Agencies will be able to recoup the cost of short notice cancellation, movement or curtailment payments where they have pre-existing arrangements with hirers.
- Contractual arrangements will be able to determine whether short notice cancellation, movement or curtailment payments can be recouped from the hirer or not.
Following its consultation the government is not proposing any changes to the current system of transfer fees or extended hirer periods, and nor will it be prescribing how agencies should be notified of available shifts, and of any changes to these, by end hirers.
Collective redundancy and protective awards
The government will bring forward an amendment to the Bill to increase the cap on protective awards in collective redundancy situations from 90 days to 180 days. This means that if employee representatives challenge that consultation has not been carried out properly on large scale redundancies, restructures and (currently) changes to terms and conditions, the tribunal can award compensation of up to 180 days per affected employees. This can be a substantial sum, and the threat of this is being used to encourage compliance.
It's also worth being aware of the impact of a failure to follow the Code of Practice on Dismissal and Re-engagement. As of 20 January 2025 a tribunal may apply an uplift of 25% to a protective award if it considers that the employer's failure to comply with the Code was unreasonable, and it considers it just and equitable in all the circumstances to do so. In this situation an employer who has failed to comply with its collective consultation obligations will be facing a significant liability.
In the consultation, it was clear that very few employers failed to carry out collective redundancies but many of them wanted help in meeting their obligations. The government has confirmed that it will issue further best practice guidance for employers of all sizes to follow when fulfilling their collective redundancy obligations.
The consultation proposed that interim relief should be available in claims for protective awards and/or claims for unfair dismissal on grounds of fire and rehire, but these proposals will not be taken forward.
The government intends to gather further views on strengthening the collective redundancy framework this year and will also gather views on updating the Code of Practice on Dismissal and Re-engagement in 2025 to ensure that it reflects the changes to fire and rehire made by the Bill.
Trade unions
The government response details the areas in which it will bring forward amendments to the Bill as a result of its consultation exercise. It will, among other things:
- Simplify the current information requirements on industrial action ballots and notice to employers and ensure that trade unions provide a 10-day notice period for industrial action.
- Deliver e-balloting as a way of increasing participation in statutory ballots.
Allow unions to take industrial action for 12 months after a ballot (up from 6 months) as a way of striking "the correct balance between ensuring industrial action is based on a recent vote but also reducing the need for re-ballots". - Improve the process and transparency around trade union recognition by streamlining the recognition process and strengthening protections against unfair practices (including by ensuring that at the point that the CAC receives an application from a union, the numbers in the proposed bargaining unit provided by the employer cannot be increased for the purpose of thwarting the recognition process).
- Extend union provisions to access workplaces to cover digital access, as well as introducing a fast-track route for achieving an access agreement where certain conditions are met, alongside a mechanism to ensure that there are appropriate penalties in place for non-compliance.
Strengthening Statutory Sick Pay (SSP)
SSP will be made available to all employees from the first day of sickness absence. The government's consultation asked for views on the percentage of earnings which should be used for lower earners, including those earning below the Lower Earnings Limit (currently £123, but due to increase to £125 in April), when calculating SSP. It has announced that the percentage rate will be 80% of normal weekly earnings, or the current rate of SSP, whichever is lower.
And finally…
On 31 October 2024 the House of Commons Business and Trade Committee (BTC) issued a call for evidence on the Bill. The inquiry took written and oral evidence with a view to informing the later stages of the Bill's passage through Parliament. On 3 March the BTC published its report in which it made various recommendations. The government has until 3 May to respond.
The recommendations include changing the zero hours contracts provisions to introduce more clarity, developing a clear and long-term industrial relations strategy and ensuring that the new Fair Work Agency is properly resourced and has effective powers to enable it to properly enforce the rights it is set up to protect.
The report also calls for the government's promised review of employment status to take place "immediately" so that any associated reforms can be implemented alongside the Bill. Finally, it calls for the government to review and update the Modern Slavery Act to make modern slavery statements mandatory, to introduce penalties and to "name and shame" companies not disclosing action plans.
It's clear that much work remains to be done. As the Bill continues its Parliamentary progress there will be further amendments to get to grips with and the finer detail will be worked out via further consultation and the drafting of regulations.
One thing's sure, as the government's various reforms take on more shape it will become easier for employers to plan ahead! In the meantime we'll continue to keep you up-to-date with the implications of all the changes.
