Following the recent release of an implementation roadmap for the Employment Rights Bill (ERB), several important amendments have been proposed to provisions within the ERB, including changes to the plan to make unfair dismissal a “day one right”, a ban on confidentiality clauses in employment agreements preventing workers from speaking out about workplace harassment or discrimination, a revised approach to fire and rehire restrictions, simplifications to the complex new framework governing zero-hours workers and reforms to whistleblowing.
Unfair dismissal
The Government had pledged to introduce protection against unfair dismissal from day one of employment. This was a central element of the ERB set to take effect in 2027.
As part of this, the Government proposed to introduce an “initial period of employment” which was expected to run for a period of six to nine months. During this period, employers would be able to dismiss staff through a more simplified process. The intention was to strike a balance between providing employees with a fair process whilst still maintaining flexibility for employers. The Government planned to consult on the specifics of this simplified process over the following year.
However, the House of Lords has voted to remove the “initial period of employment” altogether. Instead, the Lords amended the ERB to reduce the qualifying period of service for unfair dismissal from two years to six months. Arguably, this approach provides clarity, grants employees protection sooner and eliminates the need for a new legal mechanism. It could also ease the workload on Employment Tribunals.
The ERB will now return to the House of Commons. It is believed that the Government will reject the Lords’ amendment and use its majority to reinstate the original proposal. Under the Salisbury Convention (a constitutional principle the House of Lords rarely block legislation based on a government manifesto pledge) and so it is expected that they will register their concerns and then allow the ERB to pass.
Ultimately, the final outcome will determine whether day one protection comes with a more complex nine-month framework or a simpler six months’ service rule.
Fire and rehire
The ERB initially provided that it will be automatically unfair to dismiss an employee for refusing any variation to their employment contract or to allow for re-engaging or replacing the employee with another employee under varied contract terms. This was to apply unless employers could show that the reason for the contract variation was to address serious financial difficulties.
One proposed amendment introduces restricted variations which for now are contract variations relating to pay, working hours, holiday entitlement and pension. The proposed amendment also covers the inclusion of new variation clauses into employment contracts. Dismissals relating to an employee’s refusal of restricted variations will be automatically unfair.
Other types of contract variations will now be classed as non-restricted variations, dismissals relating to such variations will not be automatically unfair. However, when determining fairness, tribunals will apply the ordinary unfair dismissal test and consider factors such as whether consultations were carried out and whether any incentives were offered to the employee for accepting the variation.
A further proposed amendment protects employees from being dismissed and replaced with non-employees (such as contractors) to perform the same duties. This practice will amount to automatic unfair dismissal unless employers can show that the reason for the replacement is to mitigate financial difficulties and that the need to replace the employee could not reasonably have been avoided.
Additionally, another proposed amendment clarifies how the new rules around fire and rehire will apply to the public sector and local authorities.
Bereavement leave
The current ERB provision concerning bereavement leave extends statutory bereavement leave so that it is no longer limited to parents but more generally applicable to employees who suffer the loss of a loved one.
The proposed amendment to the ERB extends the entitlement to bereavement leave even further so that employees who suffer pregnancy loss (i.e. the person who was pregnant and their partner) before 24 weeks will now be entitled to bereavement leave of at least one week. No statutory pay has been pledged at this stage. This proposed amendment appears to be largely based on recommendations made in a report published earlier this year and will cover specific kinds of pregnancy loss such as miscarriages and unsuccessful IVF transfers.
Non-disclosure agreements (NDAs)
NDAs in this context are confidentiality clauses designed to restrict parties’ ability to disclose information. Such clauses are typically found in employment contracts and settlement agreements.
The key proposed ERB amendment concerning NDAs will make any provision used in agreements between employers and workers void if the provision prevents a worker from making an allegation of or disclosing information relating to harassment or discrimination.
The proposed amendment also applies to disclosures about how employers respond to disclosures or allegations of harassment or discrimination. This means that employers may need to reassess how investigations into such allegations are being conducted as this information can also no longer be kept confidential by way of NDAs. It is also likely that many existing employment NDAs will need to be updated to ensure that they do not contain provisions which fall foul of the proposed amendment.
Zero hours and agency workers
The ERB initially proposed an automatic right to guaranteed hours for eligible workers. However, an updated amendment provides eligible workers with a right to request fixed hours, this differs from the initial proposal which would have imposed a duty on employers to offer guaranteed hours to eligible workers.
Additionally, the ERB introduced the concept of short notice cancellation payments which requires employers to pay compensation to workers whose shifts are cancelled with short notice. Further clarification has now been provided by way of an ERB amendment defining short notice in this context as 48 hours.
Further, another key amendment to the ERB will extend the right relating to guaranteed hours to qualifying agency workers. Additionally, another amendment provides that an offer of guaranteed hours to a qualifying agency worker must contain terms and conditions relating to pay and additional matters that are no less favourable than those of a comparable worker.
Whistleblowing
The House of Lords has also recently agreed to an amendment requiring the Government to make regulations that will extend the current protection offered to employees against unfair dismissals linked to whistleblowing. The amendment will require employers to take reasonable steps to investigate protected disclosures.
This change will apply to employers with one or more of the following characteristics:
- An annual turnover of £10 million or higher
- Operations in financial services
- 50 or more employees
- Vulnerabilities concerning terrorist financing and/or money laundering
What happens next
The ERB will now return to the House of Commons for its third reading, which is scheduled to take place on 3 September 2025 after Parliament’s summer recess.
As always, employers subscribed to our Absolute HR Employment Law Package can expect to receive timely updates as and when further information about the ERB emerges.
If you have any queries about this article, please contact a member of the Employment team at Glaisyers ETL.
