Key updates to the Employment Rights Bill

The government announced significant amendments to the Employment Rights Bill (ERB) on 4 March 2025. These changes will bring additional considerations for employers and are expected to come into force in stages.

Damian Kelly, partner and head of the Employment Law team at Lodders, outlines the updates.

Protective awards increased to 180 days

The cap on protective awards – compensation paid to employees who have been made redundant without proper consultation – in collective redundancy situations will double from 90 days to 180 days to encourage employer compliance with collective redundancy consultations. This means Employment tribunals will have discretion to award up to 180 days of gross pay, depending on several factors, including the seriousness of an employer’s failure to meet consultation requirements.

Interim relief proposal dropped

Interim relief for protective awards and/or unfair dismissal claims related to fire and re-hire will not proceed. The government acknowledged that this proposal would have placed undue burden on businesses and tribunals.

New collective redundancy guidance:

The government will issue updated guidelines on consultation processes for collective redundancies soon.

Lower earners eligible for Statutory Sick Pay (SSP)

Those earning below the Lower Earnings Limit per week (currently £123) will receive SSP at 80% of their normal weekly earnings. This is likely to be implemented in 2026.

Agency workers included in zero-hour contracts:

• Notice of shifts – both the employment agency and the end hirer will be responsible for providing the agency worker with reasonable notice of shifts.
• Cancellation payments – the employment agency will be responsible to pay any short notice cancellation or curtailment payments but can re-coup costs from the hirer if agreed.
• Shift notifications – new regulations will dictate the forms and manner in which an agency worker receives shift notifications, cancellations or curtailments.
• Guaranteed hours – end hirers will be responsible for offering guaranteed hours to qualifying agency workers, with exceptions for temporary work needs (such as seasonal demand).
• Hire periods and transfer fees – no change to the current system. Agencies should continue to include transfer fees or extended hire periods in contractual agreements with end hirers, as they now are, including in future situations where an agency worker accepts a guaranteed hours offer from an end hirer.

Trade union provisions:

• Notice period – industrial action notice period will be 10 days (currently 14 days).
• Ballot turnout threshold – the current ERB proposal to repeal the 50% industrial action ballot turnout threshold will be implemented at a later date because it will require separate regulations.
• Mandate extension – industrial action mandate will be extended to 12 months (it is currently six months).
• Political fund – trade unions will no longer need to ballot members every ten years regarding whether they wish to maintain a political fund. This will be replaced with a requirement that trade unions give members notice of their right to opt-out of the political fund every ten years.

Employment Rights Bill changes: why are they important?

UK employers need to prepare for these changes by updating company policies and providing guidance to employees. Training for HR professionals and managers is crucial to understanding and implementing the new rules. Ensuring compliance with Employment Rights Bill changes will help reduce the risk of costly disputes and fines.

Lodders’ experienced employment law experts provide the full breadth of employment law advice and support, working with a variety of clients, from owners and managers of SMEs to large corporations.

For tailored advice on how the Employment Rights Bill changes may impact your business, please contact Lodders’ Employment team today.