Employment Rights Bill: 6 Big Potential Changes on the Table

This week, the government has published several proposed amendments to the Employment Rights Bill, some with backing, others still uncertain. While it remains to be seen which proposals will make it into law, the suggested changes could have a major impact on how businesses manage employee rights, workplace conduct and contractual arrangements.

Employment Hero’s compliance experts are closely monitoring developments to help employers stay informed and prepared.

Below we outline the key proposed amendments including NDA bans for harassment cases, expanded whistleblower protections and more.

1. Bans on NDAs / confidentiality agreements in discrimination and harassment cases

The government has introduced an amendment which will mean confidentiality clauses in employment contracts, settlement agreements and NDAs will be unenforceable where they relate to discrimination or harassment. This will apply to both current and former employees. 

In addition to having to update standard documents, employers will need to tread even more carefully when dealing with discrimination or harassment at work. It will no longer be possible to agree with employees that they will not discuss these matters in the future, even if they agree to drop any legal claims against the employer and/or to leave employment (which are usual terms in settlement agreements).

Given this, the importance of preventing discrimination and harassment at work will be more vital than ever.

2. Limitations on fire and rehire: Not as strict as originally planned

The Employment Rights Bill originally proposed a near total ban on fire and rehire practices. Meaning it would be an automatic unfair dismissal where an employee was dismissed to re-engage them on a varied employment contract and/or where they were dismissed for refusing any amendment to their contract.

However, the new amendment to the Bill softens this approach. By making automatic unfair dismissal only applicable for certain ‘restricted variations’ to an employment contract, including changes to pay, hours, holiday, pensions, or a change that inserts a variation clause into the employment contract (i.e., one which allows the employer to change provisions in the employment contract without the employee’s consent). 

As before, there will still be a limited exception of a finding of automatic unfair dismissal where the employer can show the changes are absolutely necessary to avoid bankruptcy. Which will still be a very hard test to meet.

For other changes to the contract, the employer will be required to follow a strict consultation process with affected employees, but will still be able to argue that any dismissal was fair overall.

This relaxation on the ban on fire and rehire may offer some necessary flexibility for employers navigating genuine business needs, though the practice remains subject to strict conditions.

3. Zero-hours / low-hours workers: Right for worker to request guaranteed hours, rather than duty on employer to offer them

As currently drafted, the Employment Rights Bill requires employers to offer guaranteed hours to workers and employees on zero-hours/low-hour contracts, based on the hours they actually end up working. 

New proposals to amend the Bill (although not backed by the government currently) want to change this so workers have a right to request guaranteed hours, rather than putting an obligation on the employer to offer guaranteed hours. 

If this change makes it through, this will be good news for employers, as if the employee does not make this request then workers can be engaged without guaranteed hours indefinitely. 

The right to request guaranteed hours will only apply if a worker has worked an average of 8 or more hours per week over a rolling 26-week period. This is a significant concession to employers wanting flexibility in the workplace, as in many casual arrangements employees will not work this many hours.

There are also amendments proposed to reduce the obligations regarding guaranteed hours for agency workers currently proposed in the Bill. 

4. Zero-hours/low hours workers: Compensation only if shift cancelled less than 48 hours before it is due to start

The Bill currently proposes that workers and employees can be awarded compensation if their shift is cancelled without reasonable notice.

A new amendment to the Bill (not government backed) proposes to limit this so compensation will only be triggered if the cancellation is made less than 48 hours before the shift starts.

5. Major changes to whistleblowing laws

A number of amendments have been put forward which will significantly change the law around whistleblowing. Whistleblowing laws protect individuals who raise issues of wrongdoing on the part of their employers or certain other persons.

These amendments have not (yet) received backing from the government, so it is not clear whether or not they will make their way into the final version of the Employment Rights Bill.

The amendments propose to do the following:

• Simplify and broaden the definition of ‘protected disclosure’ (i.e. a disclosure which is protected by whistleblowing laws) to include ‘mismanagement of public funds’ and ‘abuse of authority’.
• Require that disclosures must actually be in the public interest (whereas the current requirement is that the whistleblower just ‘reasonably believes’ the disclosure is in the public interest).
• The creation of an ‘Office of the Whistleblower’ who will be able to:
  • Set minimum standards for employer whistleblowing policies.
  • Provide an independent hotline for whistleblowers to report issues to.
  • Have enforcement powers for breaches of whistleblowing laws.
• A new obligation on employers with over 50 staff, a turnover of £10m+ or certain named sectors to take reasonable steps to investigate any protected disclosure. 
• A new offence of intentionally or recklessly subjecting a whistleblower to detriment (e.g. treating them unfavourably, reducing benefits, dismissal, etc), with Employment Tribunals being able to issue a maximum fine of up to 10% of a company’s global turnover.

6. Parental bereavement leave extended to early pregnancy loss

The government has announced a new amendment to the Employment Rights Bill that is currently before Parliament. The amendment will give families suffering pregnancy loss new rights to time off work. 

Currently Parental Bereavement Leave is only available to parents who lose a child under 18 or experience stillbirth after 24 weeks of pregnancy. There is no specific right to time off for parents who suffer a pregnancy loss earlier in pregnancy.

The current entitlement is that each parent has a right to up to two weeks leave, which is a right available from day one of employment. However, the leave is only paid where the parent has at least 26 weeks of continuous employment with their employer.

The rate of pay is either £187.18 a week or 90% of the employee’s average weekly earnings (whichever is lower). 

How will the law change?

The government wants to change the law so that families who experience pregnancy loss before 24 weeks whether by miscarriage or otherwise will also be entitled to Parental Bereavement Leave.

The proposal is that employees will be eligible for at least one week’s leave, but the exact amount will be confirmed in subsequent regulations following a public consultation. However, it currently appears that the leave will be unpaid.

Stay on top of compliance with Employment Hero

The proposed amendments to the Employment Rights Bill could significantly impact how your business manages employee contracts, conduct and rights. Ready to navigate these changes with expert guidance? Discover how Employment Hero’s HR Advisory can guide you through compliance updates, policy changes and complex employee issues.

Plus, our all-in-one HR platform makes it easy to keep your contracts, documentation and internal processes aligned with the latest legislation.