The UK Employment Rights Bill – latest updates

How is the Employment Rights Bill (the 'Bill') evolving as it makes its way through Parliament? We look at the most recent developments.

There have been several more stages in the life of the Bill and considerable debate, but little sign of significant changes to the original proposals.

During the House of Commons debates, over 200 amendments, mostly of a technical nature, were put forward, with Government amendments being approved and opposition amendments rejected. The same broad pattern has emerged during this month's debates in the House of Lords.  

On 8 May a number of detailed amendments were made to the Bill's proposals on zero hours, low hours and agency workers, flexible working and the removal of the waiting period for statutory sick pay.

Arguments put forward by members of other political parties and cross bench peers, questioning the workability of the guaranteed hours provisions for certain sectors and businesses, have not however led to any substantive changes to the Bill. 

The sectors in which zero hours contracts are most heavily used include health and social care, hospitality, retail and wholesale where in total about 630,000 zero hours workers are employed. It was suggested that for employers subject to seasonal fluctuations in demand for work, small and start-up businesses and others with a pronounced need for a flexible workforce, the rules will simply not work.  In response it was suggested on behalf of the Government that it would be a straightforward matter to vary contracts by agreement, or even to terminate them and engage staff on new terms, meaning that employers would not be locked into unworkable arrangements. This may prove more difficult than it seems given that termination of a contract in order to vary it will become automatically unfair as a result of the new 'fire and rehire' provisions in the Bill.

Business and Trade Committee recommendations – government response

The government has also published its response to 15 proposals and recommendations made by the Business and Trade Committee in a report by the Committee published in February 2025 on aspects of the Bill. Some of the report's recommendations reflect the concerns amongst employers about the workability of aspects of the Bill.

The Committee made recommendations on the provisions on guaranteed hours for zero hours workers, measures to prevent the abuse of agency work as an avoidance measure, the enforcement of equality law, employment status, industrial relations strategy and some aspects of the proposals on trade unions.

The government has now responded and provided clarification in some areas. 

Support for employers

The Committee recommended that the government considers how to use networks and campaigns to support employers to implement the significant number of new employment rights set out in the Bill, and that it tasks ACAS with leading an information campaign. The government reaffirmed its commitment to consulting on the detail of implementation,  ensuring that sufficient time and support is provided to employers to adapt to changes ahead of their commencement and working with Acas, employers, trade unions, and others to ensure rollout is a success.

Employment status 

The Committee urged the government to act on the review of employment status in parallel with the Bill to prevent false self-employment being used to avoid the protective measures in the Bill. The government confirms that it is aware of the concerns that the complexity of the employment status framework raises, but intends to pursue the simplification of employment status as a longer-term goal. 

Enforcement of equality law

The Committee recommended a review of enforcement of equality law, with a focus on how equality enforcement can be improved and how the Fair Work Agency (FWA) will work with the Equality and Human Rights Commission (EHRC) where their responsibilities overlap. The government confirmed that the FWA's remit will not include equality legislation, which will remain the responsibility of the EHRC, but that the Bill provides a framework for information sharing between the two bodies.

Fair Work Agency

The Committee emphasised the importance of adequate resourcing for the FWA in order to lead to effective enforcement, suggesting the adoption of the International Labour Organisation benchmark of one labour market inspector per 10,000 workers by the end of this Parliament. The government reiterated its confidence that the required resources can be found through the streamlining of state enforcement efforts, intelligence led investigation and targeted interventions, but also reiterated its commitment to well-resourced enforcement.

Zero hours workers

Guaranteed hours contracts. The Committee was concerned that defining a low-hours threshold creates a loophole that can be exploited by employers to avoid their obligations under the Bill. The government confirmed that it will consult on the low hours threshold but it is opposed to removing it from the Bill altogether to prevent some workers with predictable hours, such as those who work overtime, falling within the scope of the Bill. This is not the intention of the legislation. 

Guaranteed hours reference periods

The government confirms that the initial reference period for guaranteed hours (that is, the period over which the zero hours worker's hours are calculated) is likely to be 12 weeks and there will be consultation on the length of subsequent periods.

Agency workers

The Committee set out its concerns about the impact of long-term agency work and the potential for the exploitative use of agency work to avoid the obligations imposed by the Bill. The government confirmed that it has already taken steps to address these and similar concerns by consulting on the application of the zero hours provisions to agency workers and introducing amendments to the Bill to reflect the responses received.

Umbrella companies

The Committee urged to government to tackle the lack of regulation for umbrella companies and the government reiterated its commitment to doing so to ensure that individuals working through umbrella companies receive comparable rights and protections to other persons working through employment businesses, pointing to an amendment to the Bill to bring the regulation of umbrella companies under the same enforcement regime as other employment businesses. 

Trade unions

The Committee recommended the development of a clear and long-term industrial relations strategy to support a future settlement based on productive engagement between trade unions and employers. It also suggested that the new union right of access should include digital access and, in relation to recognition ballots, that there should be extended complaints periods about the conduct of ballots, more transparency and better resourcing to support smaller businesses. The government confirmed a commitment to the development of an overarching industrial relations framework. It confirmed that the Bill has already been amended to allow for digital access by trade unions. It also plans to consult on changes to the recognition process after the ERB comes into force and to bring forward a revised Code of Practice on access and unfair practices during the recognition period, which will clarify access requirements for the recognition process.

Modern slavery

On modern slavery statements, the Committee highlighted significant inconsistencies in transparency. It recommended mandatory reporting areas and penalties for non-compliance. The government confirmed that it is considering how to strengthen the statutory regime relating to modern slavery statements and will set out next steps more broadly in due course, but also referred to the Home Office's Practical guidance on transparency in supply chains, updated on 27 March 2025.

If you have any questions about these developments, please don't hesitate to get in touch with a member of our employment team. We will continue to monitor and report on developments related to the Bill as it continues its passage through Parliament.

This article is authored by Christina Morton, senior knowledge lawyer in our UK employment team.