Employment Rights Bill: New Deal Amendments - Key updates for employers (March 2025)

On Tuesday, 4th March, the UK government published its responses to five consultation papers on the Employment Rights Bill (ERB), introducing several amendments after discussions with businesses and trade unions.

These changes aim to strengthen worker protections while ensuring businesses can still operate flexibly.

??The amendments will be presented in the House of Commons next week during the Employment Rights Bill’s final stages.

Key changes include...

Higher penalties for failing to consult on collective redundancies

Employers undertaking collective redundancies (20 or more employees within 90 days) must comply with consultation requirements. Failure to do so could now result in a maximum protective award of 180 days’ pay per employee, doubling the current cap of 90 days.

Employment tribunals will determine the length of the protected period based on the seriousness of the employer’s breach and any mitigating factors. However, the government has decided not to extend interim relief provisions to dismissals related to fire-and-rehire practices or collective redundancies.

Guaranteed hours contracts for agency workers

The ERB extends new protections to agency workers, aligning them with the rights granted to zero-hour and low-hour employees. This includes the right to request a contract reflecting their regular working hours and greater security regarding shift notifications and cancellations.

Key amendments include:

• End Hirers to Offer Guaranteed Hours – The responsibility for offering a guaranteed hours contract to agency workers will rest with the end hirer rather than the employment agency.
• Shared Responsibility for Notice Periods – Both agencies and end hirers will be responsible for ensuring agency workers receive reasonable notice of shifts. Tribunals will determine liability in cases of non-compliance.
• Compensation for Short-Notice Cancellations – Agencies will be required to compensate agency workers for cancelled shifts at short notice, with the option to recover some of these costs from the end hirer.
• No Changes to Transfer Fees – Existing rules that allow agencies to charge transfer fees or require extended hire periods when an agency worker accepts a permanent position with an end hirer will remain in place.

Statutory sick pay (SSP) reforms

The ERB will expand SSP eligibility to lower-paid workers who do not currently qualify, extending coverage to an estimated 1.3 million employees.

Key changes include:

• SSP will be a day-one entitlement – The current waiting period before SSP payments begin will be removed.
• New SSP rate calculation – Eligible employees will receive SSP at the lower of 80% of their average weekly pay or the standard SSP rate (￡116.75 per week).

Industrial relations reforms

The government is updating trade union legislation to reflect modern working practices:

• Union Recognition Ballots – The Code of Practice on access and unfair practices will apply from the moment a union submits a recognition application.
• Bargaining Unit Stability – Once a union recognition application is received, employers will no longer be able to increase the size of the bargaining unit, preventing last-minute changes. However, natural workforce reductions (e.g., resignations or retirements) will still be recognised.
• Simplified Industrial Action Notices – Unions will no longer need to provide a breakdown of employees involved in industrial action or explain how figures were calculated.
• Extended Industrial Action Mandates – A union’s mandate for industrial action will now remain valid for 12 months instead of six.
• Longer Notice for Industrial Action – The notice period for strikes will increase from seven days to ten.

Stronger enforcement against non-compliance by umbrella companies

The ERB introduces new measures to ensure workers employed through umbrella companies receive the same protections as those engaged directly by employment agencies. Stronger enforcement mechanisms will be introduced to tackle non-compliance in this sector.

Next steps

The Employment Rights Bill is scheduled for its third reading next week. If passed, these reforms will represent a significant shift in employment law, reinforcing worker protections while maintaining operational flexibility for businesses.

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Disclaimer: This post (and any information accessed through links within) is for informational purposes only and does not constitute legal advice. Before taking or refraining from any action based on the contents of this article, you should seek professional legal counsel. If you need tailored legal guidance on HR, employment law, or health and safety matters, we recommend consulting with a qualified Avensure advisor.