Government announces amendments to the Employment Rights Bill

Agency workers to get the benefit of zero hours contract reforms

One of the most significant changes mentioned in the Bill are proposals that employees and workers on zero hours contracts will have to be offered a guaranteed number of hours based on the hours they actually end up working, subject to very limited exceptions. The Bill also states that workers must be given reasonable notice of shifts, as well as compensation when shifts are cancelled or changed at short notice. The government has now announced that amendments will be made to the Bill to ensure that these protections apply to agency workers too.

Harsher penalties for breaching new collective redundancy obligations

Currently, the law requires employers to collectively consult with employees when they propose to make 20 or more redundancies at one worksite. It’s important to keep in mind that employers must also notify the Secretary of State about the proposed redundancies when 20 or more redundancies are being considered.  The government had previously indicated that it wished to amend the law so that the duty to collectively consult (and to notify the Secretary of State) would apply when there are 20 or more proposed redundancies across the workplace as a whole, not just at one particular worksite. In a concession to employers, the government has now backtracked and said that the requirement that the 20 or more employees must be at one worksite will remain.  However, new amendments to the Bill will give the government the power to introduce regulations at a later date to deal with redundancies on multiple worksites  These will allow the government to set the number of proposed redundancies across a company’s different worksites which will trigger the obligation to collectively consult and notify the Secretary of State. The Bill will state that the number of employees to trigger this must be higher than 20.  In other words, the effect of the regulations might be that collective consultation is only required where there are 20 or more redundancies proposed at one worksite or where there are, for example, 50 proposed redundancies across multiple worksites. But we don’t know yet whether the number will be 30, 50, 100 or some other number. Another significant amendment to the Bill concerns penalties for breaching collective redundancy requirements. The maximum current penalty for an employer breaching these provisions is to pay 90 days pay for each employee who has been made redundant without having been consulted. The government has now announced that it will increase the penalty to 180 days pay per employee for breaching these rules. It said as part of the announcement: “We want to enhance the deterrent against employers deliberately ignoring their collective consultation obligations and ensure it is not financially beneficial to do so.“ The government has also said new guidance on how employers can meet their collective consultation obligations will be published.

No interim relief for breaches of ‘fire and rehire’ and collective redundancy processes 

One matter which the government had originally proposed as an amendment in the Bill, but has confirmed  will not be taken forward, is the introduction of  “interim relief” in relation to certain legal claims by employees. The initial proposal was designed for employees bringing a claim against their employer for breaching fire and rehire and/or collective redundancy rules. This would usually operate so that where an employee brought a claim about their employment being  unlawfully terminated, an Employment Tribunal could award the employee “interim relief” whilst they waited for their claim to be determined. This would mean that employers in this position would have to keep paying their former employees throughout the duration of the Employment Tribunal proceedings ,even though their employment had ended. Legislation such as this would put a huge financial burden on employers. The government has now confirmed it will not be pursuing this policy, so no changes are being made to the Bill regarding this.

Changes to laws around trade unions

The government has said it will introduce measures in the Bill which will create a modern framework for industrial relations. This will involve “updating the legislative framework in which trade unions operate to align it with modern work practices. 

Statutory Sick Pay for low earners

The Employment Rights Bill currently proposes to make various changes to Statutory Sick Pay (SSP). The updates in legislation suggest making SSP available from day one of employment, rather than for employees and workers to have to wait until the fourth day of absence before it is paid. The Bill also proposes to remove the lower earning threshold which currently operates so that employees and workers earning less than £123 a week are not eligible for SSP. An element of this proposed change that was previously unclear was what rate of SSP employees and workers who earned less than the lower earnings threshold would receive. The government has now announced that workers who are on low wages will either receive 80 per cent of their average weekly earnings or the current rate of SSP – whichever is lower. 

Removing umbrella company loopholes 

The government has announced that it will introduce measures so that workers do not lose rights and protections when engaged through an “umbrella company”. This is a method used by recruitment companies to use a separate entity to employ workers and which can sometimes adversely affect the workers’ employment law rights.

New powers for the government to intervene in underpayments

The government has also introduced an amendment to the Bill which gives it the power to issue employers a notice of underpayment, covering a period of up to six years, where the employer has failed to pay a worker an amount under certain legislation (including minimum wage and statutory sick pay legislation). The effect of the notice will be that the employer is required to pay to the employee the relevant amount owing.

Get prepared with Employment Hero 

Staying up to date with changing legislation isn’t easy, especially when you’re a busy business owner or HR professional. We understand that wrapping your head around what the new laws mean for your business is also challenging.  To simplify compliance, our team of experts will continue to provide updates as the government releases them.  For further advice about The Employment Rights Bill and how it could impact your business, get in touch with our HR Advisory Team.