Employment Rights Bill and its impact on workers

In the first of our series of advice pieces for PiGs AKA People in Glazing Society, HR expert Nicola Mullineux, Associate Director of HR Content at Peninsula with 21 years of experience in the HR industry, exploring the latest updates on impending legislation.

Back in October 2024, the Government laid out its plans to deliver on their pre-election promises under the ‘Plan to Make Work Pay’. This came in the form of the Employment Rights Bill, which if implemented, will bring sweeping changes to employment law in Great Britain – cited as being the biggest upgrade to workers’ rights in a generation.

The Bill focuses on five key areas; pay, time-off, equality, contracts, and enhancing existing protections. Whilst some of the finer detail has yet to be outlined, the Bill includes proposals to:

• Make unfair dismissal protections a day-one right
• Give employees access to parental and paternity leave from day one of employment and introduce a right to bereavement leave
• Increase the number of workers eligible for Statutory Sick Pay by removing the Lower Earnings Limit and making it payable from the first day of absence
• Give zero-hour worker’s a right to a contract that reflects their ‘usual’ working hours
• Limit the use of ‘fire and rehire’ to very limited circumstances
• Enhance Trade Union rights

And much more – these are just some of the key areas. In full, the Bill contains almost 30 different reforms.

Where are we now?

After passing through the parliamentary stages in the House of Commons, the Employment Rights Bill is now making further progress towards becoming law, continuing its journey through the House of Lords.

During the process so far, the Government have proposed a series of amendments, mainly in response to consultations carried out last year. These are now being progressed in the amended version of the Bill. Over 200 amendments were made by the government, resulting in the current version of the Bill being almost double the size it was when originally introduced to Parliament. Now at over 300 pages in length, the potential impact on businesses countrywide is vast.

The amendments cover reforms to workers’ rights, including (but not limited to) Statutory Sick Pay, agency workers’ rights, collective consultation, and trade union rights.

Let’s take a look at some of the key developments.

Statutory Sick Pay

The Bill now proposes that statutory sick pay will be paid to all workers from the first day of sickness at a rate of either 80% of weekly earnings, or the flat rate, whichever is lower. This means those workers who earn under the Lower Earnings Limit will be entitled to up to £100 per week more than they are under the current system. The impact of this change cannot be understated. Sickness absence will cost businesses more, with the government’s own estimations showing a cost of £1.07bn.

Zero-hour and agency workers

Additionally, the previously proposed additional rights for those on zero and low-hour contracts will now be extended to cover agency workers too. This means the end hirer will be responsible for offering a guaranteed hours contract to agency workers who have worked for them over a yet to be defined period of time. On top of this, agency workers will be entitled to compensation where shifts have been changed, moved, or cancelled without ‘reasonable’ notice.

Collective consultation

Although not a change to any laws businesses must follow, the Bill now proposes to increase the protective award a tribunal can make where employers have failed to follow their collective consultation obligations in large redundancy or fire and rehire situations. Under the proposals, the amount will increase to up to 180 days’ pay from up to 90 days’ pay.

Fair Work Agency

Under the Bill, the Government will introduce a new regulatory body, which will be known as the Fair Work Agency. This agency will have the power to bring employment tribunal claims on behalf of individuals, provide legal support and assistance to those who have brought a claim themselves and enforce the payment of statutory payments to employees.

The Government confirmed that further detail on the Bill’s proposals will be outlined in later regulations and there will be further consultations later this year on some aspects of the Bill. This will include topics such as collective consultation thresholds where redundancies are being made at more than one establishment within a business.

It is yet to be confirmed if or when the Bill will become law, however if the current trajectory remains it could do so before parliament breaks for summer recess this year. If this is the case, we may see some of the reforms come into effect as early as October 2025.

Peninsula is a leading provider of Employment Law, Human Resources (HR), and Health & Safety consultancy services and today supports more than 30,000 businesses of all sizes across the UK and Ireland, alongside branches in Australia, New Zealand and Canada.

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