Employment & Pensions Blog: Amendments to the Employment Rights Bill

In October 2024 the Government published the now famous Employment Rights Bill. The Government has since consulted on almost every aspect of the Bill, and it has now published a series of amendments that are designed to address the concerns raised by businesses, trade unions and workers. 

As with the original Bill, the bulk of the 222 pages of amendments relate to trade unions and improving industrial relations. However, there are three key elements within the amendments that employers should be aware of. 

Fair Work Agency

In an effort to reduce cost and improve efficiency, the Fair Work Agency will bring together a number of state enforcement bodies under one umbrella. HMRC’s National Minimum Wage enforcement function, the Employment Agency Standards Inspectorate, the Gangmaster and Labour Abuse Authority, and the Director of Labour Market Enforcement are all going to be brought together under the Fair Work Agency. 

The Government has now announced a significant increase in the Fair Work Agency’s enforcement powers giving them the ability to take strong action against employers. Including:

• The power to issue payment notices for underpayment of holiday pay, national minimum/living wage, or statutory sick pay. With employers being required to pay the amount due, plus a penalty. The notices of underpayment can relate to unpaid sums going back as far as six years, which far exceeds the three-month limitation period workers currently have to submit an Employment Tribunal claim.  
• The power to bring Employment Tribunal proceedings on behalf of workers, even where the workers aren’t bringing claims themselves. The Agency will also have the power to provide legal assistance to claimants in Employment Tribunal proceedings, with the cost of their assistance possibly being recoverable through any costs award at the end of the litigation process. 

Zero-hour contracts

The Government has announced that agency workers will be treated the same as other types of zero hours contract workers. Like other zero hours workers, employment businesses will be required to offer their agency workers a contract that guarantees them a minimum number of working hours a week. Agency workers will also have new rights regarding reasonable notice of shift changes, and compensation for last-minute cancellation of shifts. 

The big question throughout the consultation has been who has to comply with these obligations, the employment business or the end hirer. In its published amendments, the Government has clarified: 

• Employment businesses and end hirers will be jointly responsible for providing agency workers with reasonable notice of shift changes, and Employment Tribunals will have the power to apportion liability based on the circumstances of each case.
• Employment businesses will be required to cover payments for short notice shift cancellations or curtailment, because they have the contract with the agency worker. However, they can re-coup this cost from the end hirer where they have the contractual arrangements in place to do so. 
• The end hirer must make the offer of guaranteed working hours to the qualifying agency worker.
• The Secretary of State will have the authority to issue regulations specifying how and when agency workers should receive notifications about shift allocations, cancellations or changes. 
• An exemption applies where work is genuinely temporary such as seasonal roles.

Collective consultation

Collective redundancy protections are also being strengthened:

• The maximum protective award for failing to comply with collective redundancy consultation obligations will increase from 90 days to 180 days’ pay, and failing to follow consultation rules could now result in compensation being uplifted by up to 25%. The intention behind these increases is to deter employers from ‘buying’ employees out of their rights and treating these financial penalties as a cost of doing business. 
• The existing obligation to collectively consult where an employer is considering making 20 or more people redundant from one establishment will remain in place. However, the Government will have the power to introduce a new collective consultation threshold where the employer is considering making employees redundant from more than one establishment. 
• Interim relief is a Tribunal order that preserves someone’s employment until after the Tribunal claim process has concluded. The Government has decided not to proceed with this amendment, and interim relief will not be introduced as a remedy for breaches of collective redundancy or fire and rehire obligations.

Comment

The Employment Rights Bill and its many amendments continue to represent a significant shift in the employment law landscape. The Bill is currently making its way through the Houses of Parliament and it’s anticipated that the first part of the Bill will come into force this Summer, with the remainder coming into effect in 2026. We will continue to monitor these developments closely, and will provide updates as they emerge. 

If you require any further guidance in relation to the amendments to the Employment Rights Bill, please contact a member of the Employment team.