Report stage: responses to consultations and amendments

The government has responded to various consultations it published when the Employment Rights Bill was introduced. These cover zero hours contracts and agency workers; remedies for abuse of rules on collective redundancy and fire and rehire; reforming industrial relations law; and strengthening SSP.

In addition, it’s reported that the probationary period for unfair dismissal purposes will be set at 9 months and that the proposal for a ‘right to switch off’ has been abandoned (this wasn’t in the Bill as originally published).

Collective redundancies and fire and rehire

Currently, employers proposing to make 20 or more people redundant ‘at one establishment’ within a 90-day period, it must consult with appropriate employee representatives and provide notification at least 30 days before the first redundancy takes effect. If the employer is proposing to make 100 or more people redundant, the employer must provide the notification at least 45 days before the first redundancy takes effect.

The Bill, as initially drafted, proposed that the collective consultation obligations should apply regardless of whether the redundancies are taking place ‘at one establishment’ or not. This would have had significant consequences for employers, particularly large multi-site employers, potentially resulting in every proposed redundancy triggering the obligation to consult collectively.

In response to these concerns, an amendment restores the phrase ‘at one establishment’ so that the obligations will be triggered if either:

there are 20 or more people being made redundant at one establishment OR
another threshold is reached, where employees are being made redundant at more than one establishment

The threshold will be defined in regulations but may be either a specified number of redundancies or an overall percentage of the workforce.

The amendment also clarifies that employers will not be required to consult with all of the appropriate employee representatives together, or to undertake the consultation with a view to reaching the same agreement with all of the appropriate employee representatives.

The October 2024 consultation asked whether the maximum period of a protective award should be increased or even done away with, and whether interim relief should be applied to fire and rehire and collective redundancies scenarios.

The government response indicates that the Employment Rights Bill will be amended to increase the maximum period of the protective award from 90 to 180 days’ pay. Tribunals will continue to have the discretion to vary the length of this period to reflect the seriousness of any employer breach as well as any mitigating factors.

The government has decided against introducing interim relief in claims for protective awards and/or claims for unfair dismissal on grounds of fire and re-hire, acknowledging that this would place undue burdens on businesses and tribunals.

Guaranteed hours and agency workers

While not included at publication of the Bill, the government was clearly minded to include agency workers in the scope of its plans for zero hours contracts – if only to ensure that agency work does not become a loophole in its plans to end exploitative zero hours contracts. To that end, it consulted on it in October 2024.

The government response indicates that the Employment Rights Bill will be amended so that:

the obligation to offer guarantee hours to agency workers will fall on the end hirer rather than the agency (because end hirers are best placed to forecast and manage the flow of future work)
both the employment agency and the end hirer will be responsible for providing an agency worker with reasonable notice of shifts
responsibility will be placed on employment agencies to pay short notice cancellation or curtailment payments to eligible agency workers
employment agencies will be able to recover from the hirer the proportion of payments made to agency workers for short notice cancellations, movements or curtailments that reflects the hirer’s responsibility for cancelling, moving or curtailing the shift at short notice. This will only apply where the arrangement between the employment agency and the hirer was entered into before a date two months after the Employment Rights Bill is passed into law and where it has not been modified by them since

The government is not proposing any changes to the current system of transfer fees or extended hire periods. It believes that agencies should continue to be allowed to include transfer fees or extended hire periods in contractual agreements with end hirers, as they now are, including in future situations where an agency worker accepts a guaranteed hours offer from an end hirer.

The other major change revealed in the response is a new provision which allows a collective agreement to contract out from the rights to guaranteed hours and reasonable notice of shifts in their entirety, for both workers and agency workers. This means that the employer and an independent trade union can reach an agreement that excludes the new rights and replaces them with something else, so long as these new terms are incorporated into the contract. For agency workers, the collective agreement can be with the person who has the contract with the agency worker.

Strengthening SSP

The Employment Rights Bill contains provisions making all employees eligible for SSP by removing the lower earnings limit. However the Bill allows for lower earners to be paid less than the statutory rate. An October 2024 consultation asked what this percentage should be.

The government’s response says that this percentage rate will be set as 80% of normal weekly earnings, which will apply where 80% of an employee’s normal weekly earnings is less than the flat rate of SSP. The Employment Rights Bill will be amended to reflect this.

Fair Work Agency

The Bill creates a new state enforcement agency, the Fair Work Agency, which will consolidate existing enforcement functions, including minimum wage and SSP enforcement, labour exploitation and modern slavery, and adds holiday pay enforcement.

Amendments to the Bill will significantly increase its remit. The FWA will be able to:

enforce failure to keep adequate records of holiday pay. The amended Bill imposes a new obligation on employers to keep records demonstrating compliance with holiday entitlement (including the amount of leave and pay)
enforce failure to pay certain statutory payments to workers – including holiday pay and SSP. The FWA can issue a notice of underpayment to employers, which specifies the amount payable within 28 days. This is combined with a penalty of 200% of the sum due, payable to the Secretary of State
bring tribunal proceedings on behalf of a worker, if the worker has the right to bring a claim but it appears they are not going to. The FWA will also have the power to provide legal assistance for employment-related proceedings
recover enforcement costs incurred by the Secretary of State from employers who are not complying with the law

Industrial action

The government published a consultation in October 2024 on many aspects of its proposed industrial action and trade union reforms contained in the Employment Rights Bill.

In its response, amendments to the Bill are made in the following areas:

improving the process and transparency around trade union recognition, including streamlining the recognition process and strengthening protections against unfair practices
extending access provisions to cover digital access, in line with modern-day workplaces
introducing a fast-track route for achieving an access agreement where certain conditions are met, alongside a mechanism to ensure there are appropriate penalties in place for non-compliance
abolishing the 10-year requirement for unions to ballot their members on the maintenance of a political fund
simplifying the current information requirements on industrial action ballots - a union won't:
- have to provide information on the number of employees in each category or workplace
- have to explain how the total number was determined by it
- be required to disclose to the employer the number of employees in each category that are expected to take part in industrial action
10 days, rather than the current period of 14 days, will be the required notice for industrial action
delivering e-balloting
extending the expiry of mandate for industrial action from 6 to 12 months