Employment Rights Bill amendments: A guide for small businesses
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Posted: Tue 4th Mar 2025
The government has published amendments to its major overhaul of employment rights following consultation with business groups and trade unions.
The Employment Rights Bill brings forward 28 individual employment reforms, including workers having the right to sick, parental leave, bereavement leave and protection from unfair dismissal from the first day of a job.
It also proposes ending zero hours contracts (unless employees want to work under them), and extra protections for pregnant women and new mothers.
The Bills was a key promise in Labour's general election manifesto and its 'Plan to Make Work Pay'.
Employment Rights Bill amendments
After several months of consultation, the government has tabled more than 200 amendments including:
Zero hours contracts and agency workers
The Bill aims to tackle "exploitative zero hours contracts", with employees having the right to a guaranteed hours contract if they work regular hours over a 12 week period. An amendment extends this right to agency workers, including them receiving reasonable notice of shifts and proportionate pay when shifts are cancelled, curtailed or moved at short notice.
Read the government's full consultation response here.
Statutory sick pay a right for all workers
The right to statutory sick pay (SSP) would be extended to all workers, including those earning under £123 a week who currently don't receive it.
Employees would be provided with SSP from the first day of sickness, instead of the third day under current rules. The rate would be 80% of their average weekly wage or £116.75 statutory pay, whichever is lower.
Read the government's full consultation response here.
Doubling penalties for 'fire and rehire'
The Bill proposes banning the practice of 'fire and rehire', which involves sacking a worker and rehiring them with less favourable terms.
Companies that fail to properly consult workers must currently pay an employee 90 days worth of pay as compensation for collective redundancies. An amendment to the Bill doubles this to 180 days.
Read the government's full consultation response here.
Umbrella company non-compliance
The government proposes ensuring workers get comparable rights when working through an umbrella company as they would when taken on directly by a recruitment agency. Enforcement action would be taken against umbrella companies which do not comply.
Read the government's full consultation response here.
Industrial action and trade union recognition
The government proposes changes to rules around workplace strikes including reducing the notice period trade unions must provide for industrial action from 14 to 10 days, and extending the period over which a strike can continue without a new ballot from six to 12 months.
The changes would also ban businesses from "flooding" workforces as a way of diluting trade union membership before recognition ballots.
Read the government's full consultation response here.
Business secretary Jonathan Reynolds said:
"Past governments' low growth and low productivity economy simply did not deliver what the UK needs, which is why we are choosing stability, investment and reform, not chaos, austerity and decline.
"This is why our mission to grow the economy as part of our plan for change is based on putting more money in working people's pockets by making wages fairer and work more secure.
"Many businesses already have worker friendly practices in place and can attest to the positive impact they have on retention, productivity and job satisfaction. We want to go further and untap the UK's full potential by attracting the best talent and giving business the confidence to hire to help the economy grow."
Impact on businesses
The government describes the Bill as "firmly pro-business and pro-worker", but it has been criticised by business groups for the potential impact on employers.
Government analysis said the changes could cost businesses up to £5bn a year in total costs, with small companies facing proportionately higher costs.
Emma Jones, founder of Enterprise Nation, said:
"No one can argue that enhancing employment rights is fair and the right thing to do. Most early-stage small businesses already offer enhanced employee rights anyway.
"The only question mark is over the timing. Anything that puts businesses off from hiring just as the costs of running a business are set to rise is a barrier to growth.
"The other issue is the sheer volume of detailed amendments to wade through and understanding how these apply to small businesses that don't have a HR department to handle sensitive and complex legislation."
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