Employment Rights Bill: the latest amendments

On Monday 7 July, the government introduced  64 pages of amendments to the ERB,  including (most significantly) a whole new provision on non-disclosure agreements.  Employment Partner, Eliza Nash, takes us through some of the key changes:

Non-disclosure agreement ban

The most talked about change to the Bill is the addition of a whole new section banning non‑disclosure agreements (NDAs) relating to harassment or discrimination. The accompanying government press release says, “If passed, these rules will mean that any confidentiality clauses in settlement agreements or other agreements that seek to prevent a worker speaking about an allegation of harassment or discrimination will be null and void. This will allow victims to speak freely about their experiences and their employer able to support them publicly.”

We already have the SRA warning notice and necessary carve outs to NDAs – an outright  ban will have a major effect on settlements of harassment and discrimination allegations. Any agreement to prevent a worker from making an allegation or disclosure relating to harassment or discrimination will be void. This is not limited to sexual harassment or specific types of discrimination.

Other amendments include: 

Fire and rehire- watered down

The ban on fire & rehire originally covered changes to any contractual term without employee agreement, the only exception was when the business was in extreme financial difficulty.  

The government has now relaxed its original position slightly.  Fire & rehire ban will now only preclude dismissals to make changes to an employee’s contractual:

1. pay

2. required number of working hours

3. pension

4. shift times and length

5. time off rights, and

6. other changes to be defined in regulations (note that this might include benefits) 

These are fairly significant concessions and it looks like a common sense amendment to what were very onerous provisions.

Anti-avoidance measures introduced - the ban also covers dismissals to impose a new flexibility clause covering the above changes.

If an employee is dismissed and re-engaged to impose a contractual change not on the above list, then the dismissal will no longer be automatically unfair (normal tests apply).

 Much still depends on the new regulations, and how the exact scope of the ban is defined (on which there is likely to be consultation).

Fire & rehire ban will still present a block to changing outdated or unprofitable pay, pensions and hours structures. Employers will be allowed to hire new recruits on different terms and make pay rises conditional on employees agreeing to change - but will not lawfully be able to terminate the contracts of existing employees to impose change unless the business is facing financial collapse. 

Employers should review the flexibility clauses in their contracts ahead of the new law coming into effect (which the government has said will be October 2026).

Extension of fire & rehire ban to cover fire & replace

Extension of the fire & rehire ban to cover the replacement of employees with self-employed independent contractors, workers who are not employees, agency workers or any other individuals who are not employed by the employer, if the replacement is going to do substantially the same work. 

This “fire & replace” situation is currently treated by law as a redundancy and is potentially fair. This is what happened in the P&O ferries case, which was often cited as an example of the sort of practice the government wanted to outlaw. It is unsurprising  to see the government closing this gap. 

The new wording would mean that the replacement of a workforce with agency workers (or other non-employees) would be regarded as automatically unfair unless the employer was facing financial collapse and the measure could not reasonably have been avoided.

Transfers of employment which are covered by TUPE would not be caught by this new rule (as the employees are not dismissed)

Guaranteed hours

Another tranche of amendments to the guaranteed hours provisions, adding further to the complexity of this regime. 

The most notable amendments are those relating to how the requirements will apply to agency workers:

The latest amendments require end-hirers to make a guaranteed hours offer (GHO) to an agency worker on terms which are no less favourable than those the worker had previously been working under. In particular, pay offered must be no less favourable than either the agency terms they’d been working on, or those of comparable workers (who do broadly similar work). Given agency workers can often be engaged on different terms, depending on the assignment, this will require an audit of terms by the end-hirer to be able to justify the terms offered.

The amendments also clarify that when an agency worker accepts a GHO from an end-hirer, they will become a worker (rather than an employee). This is a helpful distinction for end-hirers but, of course, status would still need to be determined based on the overall working arrangements.

Exceptions to new rules are to be set out in future regulations – including circumstances when an offer of guaranteed hours does not need to be made or can be treated as withdrawn. 

There are also a number of proposed amendments from opposition parties which would significantly water down the guaranteed hours provisions, eg, making it a right to request guaranteed hours by an employee (rather than a requirement for an employer to offer). Opposition parties also proposed that the right to request would capture those who work 8 hours a week, over a 26 week reference period – a low threshold which would bring a lot of minimum hours workers out of the regime. As these amendments are unlikely to pass, we’ll need to wait for regulations to find out where the government will set these key details.

Bereavement leave for pregnancy loss

Extending the new right to bereavement leave to include pregnancy loss that occurs before 24 weeks of pregnancy.  This will entitle mothers and their partners to at least one week of unpaid leave. The exact length of time off will be specified in later legislation, after a consultation.

Next steps

The Bill is expected to complete its Lords stage between 14 and 21 July, with a third reading shortly thereafter. It will then return to the Commons before receiving Royal Assent, likely to take place in the autumn.

Should you wish to discuss what these changes might mean for your business, and how best to prepare, please get in touch with your usual Constantine Law contact, or message us by clicking on the button below:

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