On 4 March 2025, the Government announced that it was going to “table amendments to the Employment Rights Bill following weeks of consultation and responses from business groups, trade unions and wider civil society.”  In this insight, we highlight some of the key amendments and their likely impact.  

Where are we now? 

Our previous insights (The Employment Rights Bill: What employers need to know and The Employment Rights Bill – what you should be doing now) and webinar set out the key changes proposed in the original version of the Bill. 

The Committee Stage of the Bill’s progress through Parliament concluded in January 2025 (see the Commons Library Briefing for a very helpful summary of the Committee debates on the Bill and all the amendments). The Bill increased from 158 pages to 199 pages (see current version of the Employment Rights Bill (published on 27 January 2025)), but the key addition to the Bill from that stage increases the time limits for bringing the majority of employment tribunal claims from three months to six months.  

On 4 March 2025, the Government published responses to the five consultations on its proposals for; (1) statutory sick pay (SSP) for low earners, (2) modernising industrial relations, (3) extending zero/low hours protections to agency workers, (4) remedies in fire and rehire/collective consultation cases, and, (5) tackling non-compliance in the umbrella company market). 

The amendments have been informed by the consultations and, to some extent, the Business and Trade Committee Report to Parliament (published 3 March 2025), which sets out 21 conclusions and recommendations to strengthen the measures in the Bill and its effectiveness. Those not yet addressed by the Government include:

• Be explicit in law about precise reforms to zero hours contracts and address the loophole created by the definition of "low hours" that can be exploited by companies to avoid their obligations. 
• Accelerate, not slow down, reform of worker status and "bogus" self-employment. It calls on the government to prioritise its review of employee, worker and self-employed status "immediately", to enable any associated reforms to be implemented alongside commencement of the Bill. 
•  Set out a clear plan to adequately resource the Fair Work Agency (FWA). New rights must be explained to employers, and Acas should lead an information campaign. It calls for clarity on how the FWA will work with the Equality and Human Rights Commission where their responsibilities overlap and recommends that the government review and consult on the future of equality law enforcement. 
• Modernise the ways unions are allowed to organise in the digital age, to ensure appropriate rights of union access and equal presentation time. 
• 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.

The key government amendments 

The detail of the Government’s proposed amendments were published on 5 March 2025 in a 215 page amendment paper. The key ones to note are summarised below: 

• Rights for zero/low hours workers  

The Bill includes new rights for workers on zero or low hours contracts: (1) to be offered a guaranteed hours contract at the end of a ‘reference period’, (2) to receive ‘reasonable notice’ for any changes in shifts or working time with (3) ‘proportionate compensation’ where shifts are cancelled.  

The amendments proposed generally seek to tighten up some of the potential ‘loopholes’ and include the means to challenge employers who try to avoid their obligations. The most significant of the proposals is the extension of these protections to zero/low hours agency workers. The Government indicated (in its consultation response) that it “will continue to work closely with stakeholders to identify the best way to extend rights to agency workers without causing unintended consequences to employment agencies and hirers. This includes how best to implement the framework in the amendments, through regulations, alongside other policy levers. The Government intends to consult further in due course.” 

However, a change which goes against the direction of travel, is a new provision which makes it possible to contract out of these rights entirely under a collective agreement. 

All of the detail of how these measures will work in practice will be confirmed by further regulations, which are likely to follow after further consultation. 

• Collective redundancy consultation 

The maximum protective award for failing to collectively consult on redundancies will double from 90 days’ pay to 180 days’ pay. The aim of this change is to “ensure that employers will not be able to deliberately ignore their obligations, and it should never be the case that it is financially beneficial to do so.”It will therefore be more important than ever for employers to ensure that they handle collective redundancy processes correctly.   

The original proposal to remove the words ‘any one establishment’ from the provisions relating to a 20+ proposed redundancies has been dropped. This is in response to concerns raised that an unintended consequence of this change would leave large multi-site employers stuck in a never-ending cycle of collective consultation in respect of unrelated redundancies. The amended proposal reinstates the concept of ‘one establishment’ but then allows, in a case where employees are being made redundant at more than one establishment, for regulations to set the number of employees (higher than 20) for the purposes of determining when collective consultation applies in relation to those employees.   

• Statutory sick pay 

The Bill already makes SSP payable from the first day of sickness absence for all employees. An amendment will set the weekly rate of SSP for low earners at 80% of their normal weekly earnings, if this is less than £118.75 [the applicable weekly rate of SSP in 25/26]. This means that all employees will be entitled to SSP at the applicable rate as soon as they are off sick from work. 

• Paid holiday records 

A new obligation is introduced requiring employers to keep records demonstrating compliance with statutory holiday entitlement (including the amount of leave and pay) for 6 years. The FWA will enforce compliance, with failure to comply a criminal offence punishable with (potentially unlimited) fines.  

• Dismissals during/after pregnancy 

The Bill already makes it unlawful to dismiss an employee who is pregnant, on maternity leave or within six months after her return to work, except in specific circumstances. The ‘specific circumstances’ are still not defined, but an amendment specifies that regulations will set out the notices that will need to be given to the employee, the evidence the employer will need to produce and “other procedures” that will need to be followed.  

• Umbrella companies 

In order to address the “widespread non-compliance in the umbrella company market, depriving workers of the employment rights to which they are entitled, distorting competition in the labour market and leading to significant tax loss to the Exchequer”, the scope of the Employment Agencies Act 1973 is being expanded to allow ‘umbrella companies’ to be regulated for the purposes of employment rights.  

• Trade Unions, Collective Bargaining and Industrial Action 

The government has put forward a number of amendments to further improve and modernise industrial relations and strengthen trade union rights. These include:

• Industrial action - Repeal of the 50% industrial action ballot turnout threshold, a reduction in the information unions must provide in ballot and industrial action notices, extension of the mandate for industrial action to 12 months (currently six months), and a 10-day notice period for industrial action (currently 7 days). 
• Rights of access - scope of rights expanded to include virtual access and penalties for breach of those rights increased. 
• Recognition – strengthening protections against ‘unfair practices’ during the statutory recognition process 
• Political fund – repeal of the requirement to ballot members every ten years regarding whether they wish to maintain a political fund; instead, members must be given notice of their right to opt out of the political fund every ten years. 

• Enforcement of rights 

The Bill gives the Secretary of State the power to create the FWA to enforce workers’ rights. The full scope and power of the FWA is yet to be determined, however, there are a number of amendments which significantly increase its remit. These include the powers to: 

• Enforce failure to keep records of paid holiday (see above) 
• Enforce failure to pay certain statutory payments to workers (including holiday pay and statutory sick pay). The FWA can require an employer to pay the amount due to the worker within 28 days, plus a penalty of 200% of the sum due, payable to the Secretary of State. This could prove very expensive for employers where there have been errors in holiday pay arrangements across their workforce.  
• Provide legal assistance to workers for employment tribunal proceedings or bring them on behalf of a worker to enforce their rights.  
• Recover enforcement costs incurred by the Secretary of State from employers who are not complying with the law.  

Next Steps 

The Bill, the Government and non-government amendments and the RTC report will all be debated in the House of Commons on 11 and 12 March 2025 at the Report Stage. The ‘Report Stage’ version of the Bill will then go up to the House of Lords for further scrutiny and debate. 

What to take away 

The Bill was always intended to be transformative and will significantly change the employment law landscape if passed in its current form.  

However, as can be seen from the developments so far, the content of the Bill is subject to change as it goes through the parliamentary process, and much of the detail will not become clear until after consultations have taken place and further legislation is laid. In terms of timing, the majority of the Bill will not take effect when it is passed into law, and will require further regulations to be put in place.  

We shall continue to keep you updated as the Bill progresses and as and when further information becomes available on any of the other proposed reforms. 

In the meantime, employers should ensure that they are planning and prepared to review existing policies, procedures and contracts so that they are fully compliant with any future employment law changes, and to train workforces in advance of any implementation date. 

How Capsticks can help 

Capsticks has significant experience of supporting employers to navigate changes in employment law and policy, from reviewing of current policies, contracts, practice and implementing change, to delivering training to employees at all levels. We also deal with any complaints or specific issues that may arise in individual cases, by conducting investigations, supporting decision makers and HR, and defending any employment tribunal claims. 

For further information on how we might assist your organisation, please contact Sian Bond, Nicola Butterworth and Paul McFarlane.