Employment Rights Bill: key amendments and Lords developments

The Employment Rights Bill has now passed through the House of Commons and the second reading of the ERB by the House of Lords is scheduled to take place on the 27th March 2025.

There have been many amendments tabled to the ERB, all of which were debated in the House of Commons on the 11 and 12 March 2025. The amendments proposed by the Government were accepted and will be included in the ERB. These include:

• The proposed amendments to extend to agency workers the rights in the ERB to guaranteed hours contracts, reasonable notice of shifts and compensation for short notice of cancelled, curtailed or moved shifts (which reflected the Government’s consultation response),

• The amendment which effectively abandons the Government’ original proposal to remove the “establishment” wording from section 188, 193 and 198A of TULRCA,

• The increase to the protective award for up to 180 days for a failure to collectively consult under section 188 of TULRCA;

• Significant new enforcement powers for enforcement of “labour market legislation” which will include SSP and holiday pay – interestingly the penalty for this underpayment as currently drafted in the ERB will be 200% of the sum specified in the notice for each individual, subject to a maximum of £20,000 for each person and a minimum of £100. The sums will need to be paid within 28 days although if paid within 14 days, the liable party is only required to pay the required sum plus 50% of the penalty. Note that Regulations may amend these percentages or amounts, so we will need to watch this space on this.

• A proposal whereby if a worker has the right to bring an employment tribunal claim and it appears to the Secretary of State that the worker is not going to bring those proceedings, then the Secretary of State may, in place of the worker, bring those proceedings.

• The amendment to SSP provisions, so that those who fall below the Lower Earnings Limit will receive 80% of their normal weekly earnings, where 80% of an employee’s normal weekly earnings is less than the flat rate.

• Amendments to Trade Unions provisions which reflect the outcome to the consultation which we looked at in our previous update.

The amendments which were not included in the version of the ERB which was passed to the House of Lords are as follows:

• The Government accepted the principle of bereavement leave for pregnancy loss and indicated that the ERB will be amended during its passage in the House of Lords to accommodate this.

• The proposal to create a legal definition of kinship care will not be taken forward. However, the Children’s Wellbeing and Schools Bill will create a legal definition of kinship care for the purposes of specific measures in the Bill to ensure that local authorities have a clear and consistent understanding of what constitutes kinship care. A sum of £40 million has been provided by the Government to trial a new kinship allowance which is intended to enable children to be raised within their community by their extended families.

• The Government have committed to a review of the parental leave system, which we expect to include consultations on a right to a period of paid, protected and not transferable paternity or parental partner leave for all employees, kinship care, paternity leave and carer’s leave which were all considered at the House of Commons Report stage and the third reading of the Bill .

• During the Commons debate, the reintroduction of discrimination questionnaires was discussed. The Government confirmed that it “will be giving close consideration to the impact of the repeal of the statutory questionnaire and any steps that may be needed during this Parliament.”

The ERB is set to have its second reading in the House of Lords on 27th March. Developments will be closely monitored, with updates provided as they occur.

Equality (Race and Disability) Bill

The Equality (Race and Disability) Bill will implement  mandatory ethnicity and disability pay reporting for employers with 250 or more employees to help close the ethnicity and disability pay gaps. On the 18th March 2025, the Office for Equality and Opportunity, the Race Equality Unit and the Disability Unit launched a consultation seeking views on how to introduce mandatory ethnicity and disability pay gap reporting for large employers. It is suggested as part of the consultation that the reporting could follow similar framework as gender pay gap reporting.

Views are also being sought on if employers should be required to produce action plans for ethnicity and disability pay gap reporting. The enforcement of the pay gap reporting will fall within the remit of the Equality and Human Rights Commission.

The consultation will close on the 10th June 2025 and there will be a separate call for evidence to seek views on other parts of the Bill such as how to make equal pay effective for ethnic minorities and disabled people.