Employment Rights Bill 2024 : Government response to consultation

As many readers will already be aware, the Government introduced the Employment Rights Bill (the ‘Bill’) on 10 October 2024 announcing far reaching changes to employment law in the UK. The Bill was swiftly followed by an amendment paper published on 27 November 2024 and has since been going through a series of consultations on various changes set out in the new proposed legislation.

On 4 March 2025, the Government published its response to the consultations on some aspects of the Bill and an Amendment Paper consolidating the changes.

Headline points from the responses to the consultations regarding the Employment Rights Bill 2024

We have summarised the headline points from the responses to the consultations below.

Statutory Sick Pay

The consultation response addressed the proposals for Statutory Sick Pay (SSP) reform.

As a brief reminder, the Bill seeks to reform SSP by removing the waiting period of 3 days prior to the entitlement to claim SSP. This would allow employees to claim SSP from day one of their illness.

Furthermore, the Bill proposes to remove the requirement that an employee must earn over the Lower Earnings Limit (LEL) per week (currently £123 but due to increase to £125 in April 2025) to be eligible for SSP.

Understandably these changes were a cause of concern for organisations, due to the cost and impact the changes may have on effectively managing absences to ensure employees return to work as quickly as possible.

The Bill, as originally published, failed to fully address how SSP would be calculated for those employees who earned under the Lower Earnings Limited (LEL). Accordingly, the consultation sought a response on how this percentage should be calculated.
As a result of the consultation, the government have confirmed that employees earning below the Lower Earnings Limited will receive SSP calculated as either 80% of their average weekly earnings or the current rate of SSP, whichever is lower. . The current weekly rate for SSP is £116.75.

The Government’s reason for this is an attempt to strike the right balance between providing financial security to employees to enable them to take sick days where needed and encouraging a return to work as soon as possible, while seeking to limit the growing costs that organisations face. Whether this will actually ease employers’ concerns is yet to be seen, particularly as the Government remains committed Ito making SSP a right from day 1 of a period of sickness absence.

The Government has not yet addressed the other concerns raised by those participating in the consultation. These included suggestions that SSP eligibility should be extended to cover the self-employed, increasing how many weeks SSP can be paid for from 26 to 52 and discussions on whether there would be financial support for organisations to help deliver the reforms and cover the cost of SSP payments to staff. These changes are not being considered further at the moment; however, we will continue to provide updates as the situation develops.

Zero hours

The Government has also published its response to its consultation on zero hours contracts. The Bill proposes to overhaul zero hours contracts to increase protection for zero hours workers, and in particular abolish the existence of exploitative zero hours contracts.

In summary, the response to the consultation confirmed the responsibilities of employment agencies and employer organisations as follows:

• The responsibility to provide reasonable notice to agency workers will fall on the employment agency and the employer organisation jointly. As this is a shared responsibility the Tribunal can apportion liability to both, where necessary.
• The responsibility to pay for short notice of shift cancellation or any other curtailment payments will be on the employment agency. However, the employment agency will be able to ask the hiring organisation to cover this cost through a separate arrangement. Therefore, organisations that rely on agencies to provide their zero hours staff may see increased financial arrangements to cover this cost.
• The responsibility to offer guaranteed hours (where the agency worker qualifies for these) will be on the employer organisation.

There was some good news for employers. There will be an exception to the requirement to offer guaranteed hours to agency workers where there is a genuine need for temporary work only as opposed to a permanent need. This is particularly relevant to organisations who hire workers to meet seasonal demands and will be welcomed by those working in such industries.

The consultation response also gave the Secretary of State the right to be able to publish regulations on the form and manner of notifications to shift cancellations and curtailments. So we expect to see further details on this as the discussions develop.

Importantly, the Government’s Amendment Paper, as published following the responses to consultation on 4 March 2025, proposed additional changes to the Bill and in particular made changes to provisions surrounding guaranteed hours. The change seems to suggest that it will be possible to contract out of the requirement to offer guaranteed hours through a collective agreement and replace them with something else, so long as the new terms are contractual. But whether this proposed change will withstand the next steps of the Bill’s process is yet  to be seen.

Collective redundancy and fire and rehire

The Employment Rights Bill 2024 also extends the obligation to carry out collective consultation in redundancy situations by removing the requirement for redundancies to be at a ‘single establishment’ when evaluating whether the obligation to collectively consult applies. The proposals will mean that if an organisation has 20 or more redundancies across the business as a whole the obligation to carry out collective consultation will be triggered. This means more employers will face an obligation to collectively consult with employees as they can no longer look at separate establishments individually.

The response to the consultation on collective redundancies and fire and rehire was also published this week. This response focused on strengthening the remedies which can be imposed if organisations abuse the rules on collective redundancy and in fire and rehire situations.

The key points from the response are:

1. Protective awards – collective redundancy

The cap on protective awards in collective redundancy situations will be increased from 90 days to 180 days in an attempt to encourage employers to comply with the rules.
We strongly recommend that all employers understand their obligations during a collective redundancy situation to avoid falling foul of the rules. Failure to do so will now be even more costly for the employer.

2. Interim relief will not be introduced in ‘fire and rehire’ situations

The Government had proposed introducing interim relief in “fire and rehire” situations so employees could receive support whilst waiting for their claims for protective awards or unfair dismissal on these grounds to be heard. The government has scrapped this proposal.

This move is beneficial to employers and the government has said it has removed it in recognition of the undue burden it would have placed on organisations and an already stretched Tribunal service if it were to be enforced.

3. Collective redundancies

The Government has also confirmed that it will issue further guidance for employers on the consultation processes for collective redundancies in due course. This is in response to employers requesting greater support to assist in their compliance with their collective consultation requirements. Additional support will be welcomed by employers as they try to balance their ever growing obligations.

Following the response to consultation, the Government published their Amendment Paper on 4 March 2025 which contained their responses, and also proposed additional changes to the Bill which were not subject to the current consultation responses. Significantly, the Amendment Paper reinstates the wording of ‘any one establishment’ to the provisions relating to collective redundancy situations. The original Bill proposed to remove this wording which would have meant that collective consultation would have been required whenever the total number of redundancies across a business was 20 or more, even if each site was making fewer than 20 redundancies. This is another concession in favour of employers and will be welcomed by organisations as the change will no longer require a review of redundancies across a business.

However, the Amendment Paper goes on to state that where employees are being made redundant at more than one establishment, regulations will prescribe the number of employees (higher than 20) for the purposes of determining when collective consultation will apply. We will provide a further update once these regulations have been published.

Trade unions

The original Bill sought to significantly strengthen the power of trade unions. The changes proposed included the requirement for a statement of trade union rights to be incorporated within Section 1 employment statements, placing employers under a duty to take reasonable steps to facilitate unions access to workplaces and bolstering the rights to time off for trade union activities. The Bill also made changes to the formal requirements for ballot papers in a bid to simplify and remove some of the technicalities that can currently result in strike action being delayed.

A number of the changes made by the Conservative Government to increase the requirements for strike action and formal recognition will also be reversed. For example, the Bill provides for the removal of turnout requirements and a return to a simple majority requirement for strike action, and a reduction in the thresholds for formal recognition.

The required period of notice for industrial action was also set to be reduced from 14 to 7 days. However, the Government’s response to consultation on 21 October 2024 resulted in a conclusion that this reduction was not suitable. The Bill will now provide for a 10-day notice period. In doing so, the Government considers that this will achieve the appropriate balance in allowing employers time to mitigate the impact of industrial action while respecting workers’ rights to take strike action.

Other key changes proposed under the Employment Rights Bill include:

Day 1 unfair dismissal

The Bill will remove the current 2-year qualifying period to bring a claim for ordinary unfair dismissal. This means that unfair dismissal will become a day 1 right. This is a significant change for employers, ultimately giving employees greater protection.

There are two limitations to this right. Firstly, the right will only be applicable once the individual has started work with the organisation. Secondly, the Bill introduces the idea of an ‘initial period of employment’ akin to a probationary period. During this initial period employers are expected to be given greater flexibility to dismiss for potentially fair reasons such as performance or conduct. Any compensation for unfair dismissal claims during this period is also likely to be reduced. We are awaiting further details on this and how it may work in practice.

When the original bill was produced the length of this “initial period of employment” was subject to consultation, but it was proposed it would be 9 months and it was subject to consultation. The amendment paper published in November confirms that the “initial period of employment” will be between 3 and 9 months.

Whilst implementation is not expected until Autumn 2026, employers should have this right on their radar and will need to review their policies in relation to recruitment probationary periods to ensure that they can comply with the new rules.

Flexible working

The Bill introduces an enhanced right to flexible working, adding a new requirement that in addition to identifying one of the specified business grounds to reject a request, the employer must also demonstrate that refusal on this ground is reasonable. If the request is refused the employer must explain the grounds for the refusal, including why the decision is reasonable, in writing to the employee. The remedies continue to be limited to 8 weeks pay.

Parental leave

Parental and paternity leave will become a day one right. Parental bereavement leave (2 weeks) will be extended to cover anyone who is bereaved (expected to be 1 week unpaid).

Additionally, the Bill proposes to increase the protection for pregnant employees, employees on maternity leave and returning mothers, with details to be confirmed.

Enforcement

The Bill proposes the creation of a new ‘Fair Work Agency’ which will have the power to inspect workplaces and take direct action in relation to working time, holidays, pay (including sick pay), agency rules and discriminatory practices against migrant workers.

Action plans

More specifically to larger organisations, the Bill introduces a requirement for organisations with 250 employees or more to introduce action plans to address Gender Pay Gap reporting and supporting employees through the menopause.

The amendment paper published in November also added menstrual problems/disorders to the definition of ‘matters related to gender equality’ which will be covered by this. This is due to be set out in separate Regulations and we will continue to keep you updated.

Time limit for bringing tribunal claims

When the original bill was published, it didn’t comment on the time period to bring a tribunal claim.

The amendment paper on 27 November 2024 added proposals to extend the current time limit for bringing a claim from 3 to 6 months to the original Employment Rights Bill. So the legislation now proposes to extend the time limit for bringing all tribunal claims from the current 3 months to a new 6 months’ time limit.

This is a significant change and will likely impact commercial decisions taken by businesses and their approach to managing risks. It will give employees longer to bring a claim and mean businesses must wait longer to find out whether claims will be lodged against them.

Presuming the ACAS process will remain the same, if you add the time for the ACAS conciliation process to take place and the time for the tribunal to process the claim, an ET1 may not arrive with an employer until over 9 months after the events it is complaining about.

Next steps

On 11 and 12 March 2025, the Bill is due to go through its third reading in the Commons as part of the Commons report stage. We will provide further updates as and when further information is released.

If you have any questions about this blog, or any other employment matters, please do not hesitate to contact a member of the Employment team.

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