Last month, the government embarked on significant employment reforms by publishing its Employment Rights Bill. The bill is currently making its way through parliament, and its main provisions are expected to come into force in 2026. Our team at 3CS is monitoring the progress of the bill closely.
At the same time, the government has initiated a series of public consultations on certain key proposals. This will shape how the bill will be in its final form. Here is an overview of some of the key provisions being consulted upon and how they could impact your business.
Collective Redundancies
Currently, all UK businesses must hold a collective consultation with staff representatives when they plan to make 20 or more employees redundant within 90 days. Failure to do so can result in the employer having to pay a protective award of up to 90 days’ pay per affected employee (though the real risk, for technical reasons, is 45 days’ pay).
The government is consulting on several changes to collective redundancy laws including:
- Increasing penalties for non-compliance. The protective award could be doubled to up to 180 days’ pay. It has also been suggested that the upper cap may be removed completely.
- ‘Interim relief’ to be available to employees who file claims for protective awards so that they continue to be paid if the claim for a protective award is ‘likely’ to succeed.
Fire and Rehire (Dismissal and Re-Engagement)
The government also wishes to bear down on the practice known as ‘fire and rehire’, where an employer terminates a worker’s contract and offers re-engagement on less favourable terms.
The bill would now class this as unfair dismissal unless the employer can show that the variation was necessary due to financial difficulties and it could not reasonably have been avoided. Consultation with staff is also required.
The government is consulting on whether there should be ‘interim relief’ for those who pursue unfair dismissal claims related to violations of fire and rehire or fire and replace practices.
Statutory Sick Pay (SSP)
The bill also proposes changes in eligibility for statutory sick pay (SSP). Currently, employees under the lower earnings limit (£123 per week or less) are not eligible. This will be scrapped, meaning that all employees, regardless of income, are entitled to SSP.
Consultation has been launched on the rate of SSP for lower earners. SSP would be calculated as a percentage of average earnings and would sit between 60% and 80%.
Zero Hours Contracts
Zero hours contracts have been the subject of much discussion in recent years. While there have been cases of exploitation, in many instances, zero hours contracts are beneficial for all parties. That’s why the bill does not propose an outright ban on zero hours contracts and workers who would like to continue on zero hours contracts will still be able to do so.
Instead, the bill proposes a number of changes now subject to public consultation. Some of the notable changes include:
- employees to have a right to guaranteed hours that reflect the average hours they have worked; and
- employees will also be entitled to reasonable notice of shifts and compensatory payments when shifts are cancelled or curtailed on short notice.
The government is consulting on how this can be extended to agency workers.
How 3CS Can Help
We at 3CS will be following this public consultation closely and are more than happy to help ensure that, when it is clear exactly how the law is to be changed, your contracts and policies are fully compliant with UK employment law.
To our experienced team of employment solicitors, employment law is an ever-changing legal landscape. We can help you navigate this landscape so that you avoid expensive tribunal claims.
For further information on how to protect your business, contact us today to arrange a consultation.
