UK Employment Law Coffee Break: Employment Rights Bill developments, and remote and hybrid working

Employment Rights Bill: Responses to consultations and proposed amendments

This week has seen the government publish its responses on a number of initial consultations published at the end of last year on proposals in the Employment Rights Bill. These cover: zero-hours contracts and agency workers, collective redundancy remedies, trade union legislation and statutory sick pay.

Alongside this, a number of amendments to the bill have also been published for consideration. As well as those proposed by the government, there are also a significant number of amendments proposed by individual MPs, so employers will need to wait to see how far they will progress in the parliamentary process.

Some of the more significant proposals for employers are set out below. The majority of the provisions are expected to come into force in 2026, although some will come into force when the bill receives Royal Assent (expected this year) or shortly after. We are regularly updating our microsite on the reforms to reflect the latest position.

Doubling the maximum protective award for breach of collective redundancy rules

Following its consultation, the government has proposed amendments to the bill, doubling the maximum amount of the protective award for breach of the collective consultation rules under the Trade Union and Labour Relations (Consolidation) Act 1992 from 90 days' pay to 180 days' pay on the basis that this is the "most proportionate and balanced approach".

Employment Tribunals retain their discretion to make awards below this maximum considering what is just and equitable in light of the seriousness of the employer's actions and other mitigating factors. Guidance for employers on best practices in consultation processes for collective redundancies will be published "in due course".

Dismissal and re-engagement

The government has confirmed that during 2025 it will be updating the existing statutory Code of Practice on Dismissal and Re-engagement to reflect the relevant provisions of the Employment Rights Bill (which essentially make it automatically unfair for an employer to dismiss and re-engage an employee on new terms unless specific criteria are met) and monitor compliance.

Employers should note that a failure to comply with the code may see an Employment Tribunal uplift compensation awarded by up to 25%, including any protective award for a failure to inform and consult collectively. On the basis that the provision to increase the maximum protective award to 180 days is passed, this could see an uplift of an additional 45 days' pay where there is a failure to comply with it. While the government has rejected at this stage introducing new rights to interim relief in collective redundancy and fire and re-hire situations, it has not ruled out introducing further remedies to improve compliance in the future.

Collective redundancy rules

The bill, as initially drafted, removed the "one establishment" rule for triggering the statutory collective consultation provisions, meaning that employers would potentially be faced with monitoring redundancies across the whole of their organisation to ascertain whether or not the collective rules would be triggered in particular instances.

An amendment to the bill has been tabled, providing that the collective consultation rules will be triggered where there are 20 or more redundancies at one establishment or where another threshold is met with the criteria set out in regulations. Explanatory notes to the proposed amendment give the example of the trigger being by reference to a particular percentage of total employees across all establishments.  

Proposed amendments to the bill also clarify that although statutory collective consultation must be carried out with all appropriate representatives, it need not be carried out with all appropriate representatives together or with a view to reaching the same agreement with all appropriate representatives.  

Statutory sick pay

Following consultation, it is proposed that, for low-earning employees, statutory sick pay will be calculated at the lower of 80% of their normal weekly earnings or the flat rate. The government believes that this rate strikes the right balance between providing financial security to employees and retaining incentives to return to work, while limiting additional costs to business.

The government has also confirmed its commitment to provide for statutory sick pay from the first day of sickness by removing the current statutory waiting period and that the flat rate of SSP will continue to be subject to an annual uprating process. The lower earnings limit is currently £123 a week but is due to increase to £125 in April. The rate of SSP will increase from £116.75 per week to £118.75 per week from April 2025.

Trade unions recognition and industrial action

Following consultation, the government has proposed a number of amendments and provided further detail around its proposals to reform trade union recognition and industrial action laws. Headline points include:

• The proposals around trade union access to the workplace for collective bargaining purposes will extend to digital access (for example, via a staff email) as well as physical access and provisions for the Central Arbitration Committee to issue fines for non-compliance.
• Provisions to strengthen the rights of trade union representatives not to suffer a career detriment due to their affiliation with a union.
• Setting the maximum number in a bargaining unit for trade union recognition at the date that the Central Arbitration Committee receives an application for recognition.
• Making it easier for trade unions to bring complaints of unfair practices during recognition applications.
• Removal of a requirement for trade unions to ballot members every 10 years on whether or not they wish to maintain a political fund; instead unions will be required to give members notice of their right to opt out of the political fund every 10 years.
• Provision to reduce the information which must be provided in ballot notices which unions must give to employers in notices of industrial action.
• A trade union's mandate for industrial action will expire after 12 months (as opposed to six months).
• A requirement for a 10-day notice period for industrial action (increased from the initial proposal of seven days).

Extending protection for zero hours and low hours workers to agency workers

A central aspect of the bill is to protect workers on low income and low security contracts. It contains measures which provide a right for zero hours and low paid workers to guaranteed hours reflecting the hours worked over a set reference period (although there is no requirement for them to accept this offer) and also a right to be given reasonable notice of shifts and changes to shifts and compensation when a shift is cancelled or moved at short notice. Following its consultation, the government has tabled amendments which will also enable agency workers to receive this protection. The provisions are complex, but headline points are:

• The hiring entity will have the responsibility of making the offer of a guaranteed hours contract to an eligible agency worker, although provision is made for regulations to be introduced which would potentially place this obligation on the agency (or other entities) in specific circumstances. The bill does provide the ability for the duty to make an offer of a guaranteed hours contract to be excluded under the terms of a collective agreement. The proposed amendments also extend contracting out provisions to agency workers.
• Responsibility for providing qualifying agency workers with reasonable notice of shifts will be shared by agencies and hirers.
• Agencies will be responsible for paying agency workers compensation for short notice cancellation, curtailment or movement of shifts but with specific provisions enabling agencies to recoup these costs from hirers provided they meet the statutory criteria.

A further consultation will take place on the detail of regulations which will bring these measures into force. The government has also committed to develop guidance to assist all parties in understanding how the new rights will work in practice. It has also confirmed that it will be consulting on the scope of statutory provisions which will exclude those who are engaged in genuinely temporary and/or seasonal work from the scope of this new protection. Read our Insight for more on reforms affecting agency workers.

Other proposed amendments

Other amendments proposed by the government to the bill include:

• A new obligation on employers to create, maintain and keep records relating to annal leave "in such manner and format as the employer reasonably thinks fit"; records must be kept for six years and a failure to comply will be an offence punishable with a fine.
• A new power for the secretary of state to give an employer a notice of underpayment where an employer has failed to pay a worker specific amounts due set out in legislation (including minimum wage and statutory sick pay).
• Provision for regulations currently provided for in the bill about redundancy or dismissal during or after a protected period of pregnancy to also make provision for procedures to be followed by employers and the consequences of failing to follow those procedures.  
• Proposals to strengthen the regulation of umbrella companies for employment purposes with further consultations to take place on regulations to ensure workers have comparable rights and protections when working through an umbrella company as they would have if working directly for an employment business.
• Extending the remit of the Fair Work Agency including enforcement of any failures by an employer to keep adequate annual leave records and a failure to pay certain statutory payments, such as holiday pay and statutory sick pay. Enforcement powers will include the ability to impose a penalty of up to 200% of the sum due which could be significant where, for example, there is a miscalculation of holiday pay across the workforce. The Fair Work Agency will also be able to bring proceedings on behalf of a worker and provide legal assistance for employment related proceedings, as well as recovering their enforcement costs from an employer.  

There are also a number of tabled amendments which have not been introduced by the government but instead by individual MPs. Employers must wait to see how far these progress in the parliamentary process but in the meantime they will need to be sensitive to the spotlight that these will inevitably shine on particular issues. The amendments include:

• An amendment to provide for two-week bereavement leave on pregnancy loss (which would include miscarriage, ectopic pregnancy, molar pregnancy, medical termination and an unsuccessful attempt at in vitro fertilisation due to embryo transfer loss).
• A new proposal for 10 working days' leave for victims of domestic abuse and protection against suffering a detriment or dismissal where an individual is or is suspected to be a person affected by domestic abuse. It is also proposed that employers are placed under a duty to take all reasonable steps to prevent domestic abuse and to develop and publish a policy to support workers who are victims of such abuse.
• A new proposal to reintroduce a right for workers to issue an employer with a discrimination questionnaire under the Equality Act 2010.
• A proposal to make caring a protected characteristic under the Equality Act 2010.
• Amendments to the Health and Safety at Work Act requiring the adoption of proactive and preventative measures to protect all persons working in their workplace from violence and harassment, including gender-based violence, sexual harassment, psychological and emotional abuse, physical and sexual abuse, stalking harassment including online threats of harassment.
• Provision for the proposals around equality action plans to include carers.
• A consultation on providing for "protected paternity or parental leave" and a proposal to extend paternity leave to 52 weeks.
• Provision for paid carers' leave.
• Proposals to raise the statutory rates applicable to family leave, including reflecting the real living wage.
• A new requirement for companies with more than 250 employees to publish their parental leave and pay for parental leave policies.
• The introduction of kinship leave and associated protections.
• Extension to the right to be accompanied to allow a worker to be accompanied by a person certified in writing by a professional body as having experience/training in acting as a worker's companion at disciplinary or grievance hearings.
• A proposed new definition of worker and test for determining worker status in the Trade Union and Labour Relations (Consolidation) Act 1992.

While no mention is made in the government announcements and amendments to a proposed statutory "right to disconnect", media reports have stated that this is being dropped. It had been understood that the government was already looking to introduce a statutory code, rather than specific statutory obligations – employers must now wait to see how, if at all, this is pursued – but it seems likely that it is not a high priority.

Next steps

The latest government announcement and consultation responses bring further considerations for employers to get on top of. The government has stated that while "many businesses already have worker-friendly practices in place and can attest to the positive impact they have on retention, productivity and job satisfaction… [the government wants] to go further and untap the UK's full potential by attracting the best talent and giving business the confidence to hire and help the economy grow".

While the latest announcement covers a number of proposals, the bill is wide-ranging and there are many other proposals affecting employers, including the day one right to unfair dismissal and reforms around third party harassment. Our employment law reforms microsite will continue to be updated as the bill progresses: as well as providing the latest information we have on implementation, it sets out the impact on and actions for employers. We are also anticipating, as indicated by the government, further consultations and draft regulations which will provide further detail on the government proposals and how they will operate in practice.

Remote and hybrid working: call for evidence launched

A call for evidence has been published by the House of Lords Committee on home-based working as part of its inquiry into the effects and future development of remote and hybrid working in the UK.

The inquiry will address the challenges and opportunities for workers and employers, the impact on productivity, and any wider consequences of remote and hybrid working for the UK economy and society. It will also consider the extent to which these impacts vary depending on the characteristics of the worker or employer and consider any policies the government could enact in this area. It will report by 30 November 2025.

The call for evidence seeks written submissions on a variety of topics, including but not limited to:

• The impact of remote and hybrid working on individual physical and mental health.
• The challenges and opportunities of remote and hybrid working for workers and employers.
• How worker and employer needs can be balanced, to ensure mutually beneficial employment arrangements.
• Views on why some employers have implemented back-to-office mandates, while others continue to support remote and hybrid working.
• What, if any, key policy or legislative changes the government should make in respect of remote and hybrid working.

The deadline for submissions is 10am on 25 April 2025.