Choy Lau
- Legal Director
- Employment
The Employment Rights Bill has undergone significant amendments following extensive consultations and parliamentary debates. Here’s an overview of the key updates.
‘Right to Switch Off’ Abandoned
Initially proposed as part of the “New Deal for Working People,” the right to disconnect from work-related communications outside working hours has been reportedly abandoned. When the Bill was introduced in October, the measure was seemingly downgraded to a code of practice in the Government’s Next Steps documents. Now, The Times has reported a Government source stating: “The right to switch off is dead”.
Without a mandated right to switch off, employers will not have to take any additional action in this regard. However, they will still need to manage the potential risk of overworking employees, potentially leading to burnout, decreased productivity and potential breaches of health and safety requirements.
Zero Hours Contracts
The new provisions will be extended to cover agency workers. Under the amendments, the obligation to offer guaranteed hours will now rest with the end user of the worker’s services. However, it will be possible to place this obligation on agencies in certain circumstances.
Agencies will be responsible for making payments to workers if there are short-notice cancellations, movements, or curtailments of a shift, as they will be on the agency’s pay roll. For pre-existing contracts, agencies will be allowed to recoup costs to the extent the hirer was responsible. Moving forwards, agencies and hirers will remain free to negotiate terms, allowing them to determine how costs should be dealt with.
Employers will have to ensure that any agreements with agencies are very clearly drafted moving forwards and seek to provide stable working hours to any current zero-hour employees and agency workers.
Collective Redundancies, Dismissal and Re-engagement
The Bill retains the threshold of 20 or more proposed dismissals at “one establishment” to trigger collective redundancy consultations. However, it introduces a different, higher threshold for dismissals across multiple establishments, which will be detailed in future regulations. The Government will consult on this alternative threshold in the meantime. Employers will need to keep an eye on what this threshold will be and possibly prepare for more collective consultations in the future.
The Bill has doubled the maximum for protective awards from 90 to 180 days for failing to adhere to collective consultation requirements. The Government has also confirmed that interim relief will not be available for employees who present a claim for a protective awards or make an unfair dismissal claim in ‘fire and rehire’ situations.
Doubling the maximum limit for a protective award means higher potential costs for employers who don’t follow collective consultation rules, and it should be noted that protective awards can be made for each affected employee and is not subject to the cap on a week’s pay. They are meant to be punitive in nature rather than based on harm or loss to the employee. Although interim relief isn’t available for fire and rehire claims, employers still need to be cautious about unfair dismissal claims.
Trade Union Rights
Several amendments strengthen trade union rights. These include simplifying the statutory recognition process, providing a digital right of access to employees, changes to industrial action ballot and notice requirements, and an extension of the mandate for industrial action from 6 to 12 months.
These measures mean employers may face more frequent and prolonged negotiations with unions, as well as managing a general increase in union recognition and union activities.
Statutory Sick Pay (“SSP”)
The lower earnings limit for eligibility will be removed and SSP will be available from the first day of sickness absence for all (removing the current three “waiting days” when SSP is not payable). For those earning below the lower earnings limit, SSP will be set at 80% of their normal weekly earnings.
Removing the lower earnings limit means more employees will qualify for SSP, increasing the financial burden on employers. Employers will also need to update their payroll systems to accommodate the new SSP calculations for lower-earning employees.
Record Keeping for Annual Leave
Employers will be required to keep records for six years to show compliance with paid annual leave entitlements under the Working Time Regulations 1998. Failure to comply will be punishable with a fine. Naturally this will increase the administrative burden for employers.
Contracting Out of Guaranteed Hours and Notice Requirements
Employers may be able to contract out from the rights to guaranteed hours and reasonable notice of shifts for both workers and agency workers by using a collective agreement. The Government’s proposed amendments include a provision that allows employers to exclude these requirements via a collective agreement, which must be incorporated into individual contracts.
Fair Work Agency Powers
The Fair Work Agency (FWA) will be empowered to enforce compliance with statutory payments, including holiday pay and SSP. The FWA can issue notices of underpayment (which would require the employer to pay the worker the underpaid amount), bring tribunal claims on behalf of workers, and recover enforcement costs from non-compliant employers. It remains to be seen if the FWA will have ‘real teeth’ so to speak but in principle employers could be facing greater scrutiny in the future.
The Bill is still progressing through parliament, having gone through both first and second reading and the committee stage. Further changes may yet be made before it receives Royal Assent and becomes law. The majority of changes are not expected to take effect until 2026, with consultations continuing throughout 2025.
Meet the team:
George Cornell
- Solicitor
- Employment
