Key amendments to the Employment Rights Bill

The Employment Rights Bill (ERB) is set to introduce significant changes to UK employment law, the majority of which are expected to take effect in 2026.  

On 4 March 2025, the Government announced a series of amendments to the ERB. These changes result from the Government’s response to its statutory consultations, as well as additional amendments which the Government is proposing outside the consultation areas. Responses to the consultations have now been published, together with a significant number of proposed amendments to the ERB (now up to 310 pages!) in response to early consultations on topics including statutory sick pay, collective consultation and guaranteed contracts for agency workers.

The proposed changes could have far-reaching implications for employers, affecting hiring practices, absence management, and Employment Tribunal claims. In this edition of our newsletter, we bring you up to date with an outline of the key amendments set out by the Government and a summary of what employers can do to prepare.

Statutory Sick Pay (SSP) – the cost of absence

Current Position

At present, SSP is only payable from day four of an employee’s sickness absence. Employees must earn at least £123 per week to qualify (due to increase to £125 in April 2025), and SSP is set at a fixed weekly rate of £116.75.

ERB Amendments

The proposed changes will make SSP payable from day one of incapacity, removing the current three-day waiting period. Additionally, the earnings threshold for eligibility will be eliminated, making SSP a universal right available to all workers, regardless of how much they earn.  SSP for low earners is to be set at the normal rate or 80% of their average weekly earnings, whichever is lower.

The Government has published its consultation response on strengthening SSP under the Employment Rights Bill. The consultation focused on establishing what percentage of earnings should be used to calculate SSP for low rate workers, stating that this is an attempt to strike a balance between providing financial security for employees, as well as ensuring that employees are incentivised to return to work when they are able to, and limiting additional costs to businesses. These proposals will be confirmed by an amendment to the ERB.

Potential Impact on Employers

For employers, these changes are likely to result in increased costs, particularly for those who do not currently offer contractual sick pay from day one of absence. Businesses that employ a high proportion of casual or zero-hours workers may be disproportionately affected, as SSP will now be payable even for those working minimal hours. Another anticipated consequence is an increase in short-term absences, as employees may be more inclined to take time off work when SSP is available immediately.

How Employers Can Prepare

Employers should take proactive steps to tighten absence management policies. Ensuring clear guidelines on sickness absence, including formal return-to-work interviews and absence ‘triggers,’ will be key to discouraging unnecessary absences. Monitoring patterns in sickness leave and identifying trends can help employers manage absenteeism effectively. Additionally, considering flexible working arrangements may help employees return to work sooner and reduce prolonged absence due to ill health.

Zero Hours Contracts – greater protection for workers brings new challenges for employers

The Government has confirmed that the Employment Rights Bill will introduce a new framework to regulate zero-hours contracts, with further secondary legislation to clarify the details. The measures will apply not only to direct employers but also to agency workers, significantly changing the way temporary staff are engaged.

ERB Amendments

The ERB already includes three major protections for zero-hours and low-hours workers:

1. a right to be offered guaranteed hours for zero and low hours workers who have completed a set reference period of continuous work. The number of hours offered will have to reflect the number of hours that the worker regularly works during a reference period (how this period is to be calculated will be specified in regulations, but we expect that it will be 12 weeks);
2. a right to reasonable notice of shifts and changes in shifts
3. a right to compensation if a shift is cancelled, moved, or curtailed at short notice.

The Government has also confirmed that it will table amendments to the ERB to include the extension of these protections to agency workers, under a new regulatory framework, meaning that both employment agencies and end hirers will bear responsibility for compliance. This is to prevent employers from using agency workers as a 'loophole’ in the Government’s plans to end ‘exploitative zero hours contracts.’

The Secretary of State will have the right to publish regulations stipulating the manner and form in which notification should be given to the agency worker of shifts, cancellations or curtailments.

Who Will Be Responsible for Compliance?

• Notice of shifts and changes:  this will be the joint responsibility of the employment agency and the end hirer. If a worker brings a tribunal claim, liability may be apportioned between the two parties;
• Compensation for cancelled shifts: this will be paid by the employment agency, but agencies will have the right to recoup the cost from the end hirer if they have arrangements in place with the end hirer allowing for this;
• Guaranteed hours for agency workers: the end hirer will be responsible for offering qualifying workers guaranteed hours. Businesses will not be required to offer guaranteed hours if they can demonstrate a genuine temporary work need, such as seasonal demand fluctuations.

Potential impact on employers

The Government’s consultation response confirms a commitment to ‘retaining necessary flexibility for employers in how they manage their workforces.’ The detailed provisions will be key to determining how this can be achieved. These changes could present significant cost and administrative challenges for businesses that rely on zero-hours and agency workers. While the measures are intended to provide greater job security, they may also reduce the flexibility that makes these working arrangements attractive to both employers and workers. Businesses will need to assess their hiring models carefully to ensure compliance without undermining operational agility. They Government has stated that it will develop guidance to assist workers, agencies and end hirer in understanding the new rights before they come into force.

Trade Union reform – creating a ‘modern framework’ for industrial relations

Following a consultation on modernising industrial relations, the Government has proposed several key changes to trade union provisions in the Employment Rights Bill. These measures are designed to streamline union procedures while enhancing protections for workers. The changes have the potential to lead to greater union presence in many workplaces, and to increase the number of employees whose terms are determined by collective bargaining.

What Are the Key Changes?

The proposed amendments to the ERB include:

• reducing the notice period which unions must provide to employers for industrial action from the current 14 days. The Government is currently proposing a 10 day notice period;
• delaying the current ERB proposal to repeal the 50% turnout threshold for industrial action ballots, which will require separate regulations, to coincide with the introduction of e-balloting;
• simplifying notice of industrial action and increasing the period for which a ballot in favour of industrial action provides a mandate from six months to twelve months before it expires;
• expanding the rights of access of Trade Unions to the workplace, to include virtual access alongside or instead of physical access. There will be a fast track process for approval of access agreements that meet certain criteria, and a mechanism to enforce penalties for non-compliance with access requirements, including the introduction of a framework for fines issued by the Central Arbitration Committee (CAC) for non-compliance with union access rights;
• replacing the requirement for unions to ballot members every ten years regarding whether they wish to maintain a political fund, with a simpler requirement to remind members every 10 years of their right to opt-out of contributing to the union’s political fund;
• introducing e-balloting in order to make voting more accessible.

Employers should review their industrial relations policies to ensure compliance and minimise the risk of industrial disputes.

Conclusion

The Employment Rights Bill represents a major shift in UK employment law. To remain compliant and mitigate potential risks, employers should take proactive steps to adapt to the new landscape. Strengthening recruitment and probation policies will be essential to minimise dismissal risks under the new unfair dismissal framework.

Reviewing absence management procedures will help control costs as SSP rules change. Improving record-keeping and compliance processes will be crucial in light of extended ET claim time limits and the introduction of the Fair Work Agency (see below).

The Bill will now move to the Reports stage of the House of Commons for parliamentary scrutiny.

If you have any questions about how these changes may affect your business, or if you need assistance with employment law compliance, please get in touch with our team at Boardside Law.