Following close on the heels of a tranche of stakeholder engagement detailed in our last monthly update, the Government has published several further consultations on important facets of the Employment Rights Act 2025 (ERA), and beyond.
The three consultations considered here cover a broad range of employment issues including collective consultation in redundancy situations; ‘detriment’ for taking part in industrial action; and the modernisation of the agency worker framework.
Trigger for Collective Consultation obligations
Currently, collective consultation is only legally required if an employer proposes to make redundant 20 or more employees ‘at a single establishment’ within a period of 90 days. The Government’s proposal to remove the words ‘at a single establishment’ from this test were dropped after pushback from employers and business representatives that larger organisations would end up in a state of ‘perpetual’ collective consultation. Instead, an additional ‘organisation-wide’ test will be added to the existing rules.
On 26 February 2026, the Government published a consultation seeking views on the level and methods by which the new organisation-wide threshold for triggering collective redundancy obligations might be set.
The Government's preferred approach is to set a single fixed number within the range of 250 to 1,000 proposed redundancies. The Government considers this to be the easiest way to ensure that employers understand their obligations, and that employees and trade unions are certain when they are entitled to participate in collective redundancy consultation. It is therefore viewed as the method least likely to lead to disputes. The consultation asks which of a fixed threshold of 250, 500, 750 or 1,000 redundancies would be most appropriate.
The Government also considers other methods for setting the organisation-wide threshold, including by applying different fixed numbers according to the size of the employer, to be more proportionate relative to the size of the employer. The alternative proposal is:
- 250 redundancies for organisations with 0 to 2,499 employees.
- 500 redundancies for those with 2,500 to 9,999 employees.
- 750 redundancies for those with 10,000 or more employees.
However, this approach would permit the largest employers to make many more redundancies without being required to undertake collective consultation, and so the Government's view is that this option may not provide adequate protection to employees. It may also be difficult for employers who sit on the peripheries between tiers to calculate their size and would create additional requirements for employers and employees to understand when the collective consultation obligations apply. If this approach is pursued, the Government proposes that employers calculate their employee numbers against a snapshot date annually, proposed as 5 April to align with the start of the financial year.
The Government proposes not to pursue a percentage-based method as this would add significant complexity for employers. It would make it difficult for employees and trade unions to know when the threshold has been hit, and therefore hard to know when employers are in breach, which may create unnecessary disputes.
The consultation notes that any regulations proposed following the consultation will have to be approved by both houses of Parliament before they are brought into force.
The Government also states that it intends to produce a Code of Practice on collective redundancy obligations and plans to launch a further public consultation on this proposed code in 2026.
Closing date: 21 May 2026
Detriment for taking Industrial Action
The ERA 2025 will introduce a new, additional protection for employees subject to any detriment ‘short of dismissal’ for taking industrial action (for example a withdrawal of benefits) (s76 ERA 2025). This plugs the gap highlighted by the Supreme Court in Secretary of State for Business and Trade v Mercer, that striking employees are currently protected from dismissal but not from other detriments, which was held to be incompatible with Human Rights law. Read our previous insight.
New section 236A Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) will prohibit an employer from subjecting a worker to a detriment ‘of a prescribed description’ that has the ‘sole or main purpose of preventing or deterring the worker from taking protected industrial action or penalising the worker for doing so’.
The consultation seeks views on what the prohibited detriments should be. The Government's preferred option is to prohibit all forms of detriment, which would be consistent with existing laws on unlawful detriment in other contexts. Importantly, the consultation notes that proportionate deductions from pay during a strike or industrial action are not currently considered a detriment and will continue to be allowed to the same extent as under current law.
However, the views are also sought on the alternative approach of creating a list of prohibited detriments. The consultation sets out arguments for and against an exhaustive list of prohibited detriments or categories of detriment, although it provides relatively little detail as to what might be included in such a list.
The Government also proposes that claims under section 236A relating to prohibited detriments, should be subject to adjustments to compensation for unreasonable failure to comply with the ACAS Code of Practice on Disciplinary and Grievance Procedures.
Further consultation details
Closing date: 23 April 2026.
Modernising the Agency Work Regulatory Framework: ‘Umbrella’ Companies and more
Separately from ERA 2025, The Department of Business and Trade (DBT) has launched a consultation on the modernisation of the Regulations that govern agency work; The Conduct of Employment Agencies and Employment Business Regulations 2003 (Conduct Regs).
The Conduct Regs were designed for a ‘simple’ supply chain between agency, worker, and hirer. However, the modern agency work market often runs through longer supply chains, sometimes with ‘umbrella companies’ sitting between agencies and workers.
Typically, in an ‘umbrella company’ arrangement, the worker is an employee of a company and is subject to tax and NI under PAYE. The worker is often not a director or shareholder of the company or involved in the running of the company in any way. The company will not usually source work for the worker; It is usually the worker who arranges temporary work, either through an employment agency or directly with a client. The umbrella company invoices the client for the worker's services and handles pay and tax matters for the worker in return for a weekly or monthly fee.
The Government is already amending the definition of ‘employment business’ (through s.36 Employment Rights Act 2025) so ‘umbrella companies’ are pulled into the regulatory framework and can be regulated through the Conduct Regs. This consultation is about how the Conduct Regs should then be updated so they reflect modern working practices.
The stated aims of the consultation are to increase transparency and provide assurance for hirers, while also ensuring fair remuneration and other safeguards for temporary workers.
Key questions raised by the consultation include how to create greater transparency around pay, contracts and employment rights, and how to empower agency workers with greater security and choice around how they work.
The Conduct Regs are currently enforced by the Employment Standards Agency (EAS), but enforcement will move to the new Fair Work Agency, following its establishment in April 2026.
Views are also invited on whether the Agency Workers Regulations 2010, including the 12-week qualifying period for equal pay and conditions, remain fit for purpose alongside the new ‘guaranteed-hours rights’ set out in ERA 2025. The new ERA 2025 provisions include an obligation on employers to monitor hours worked by irregular or low hours workers and offer an employment contract with ‘guaranteed hours’ if hours worked regularly exceed a prescribed threshold.
These proposed changes have the potential to significantly undermine the agency working model, as employer hirers would be obliged to offer direct employment contracts to agency workers meeting the relevant criteria (the exact details of which are yet to be determined through consultation).
Any changes to the current regulatory structure may have significant implications for the NHS, and for any other employers or organisations that make extensive use of agency/bank staff.
Closing Date: 1 May 2026
If you have any questions or concerns about these consultations or would like any further detail, please do not hesitate to reach out to our employment law solicitors.
Previous insights in our ERA Series
Employment Rights Act Series: April 2026 changes spring into force – practical considerations for employers (Partner, Mark Landon and Principal Associate, Suzanne Nulty) 27 March 2026
Employment Rights Act Series: Further consultations for Spring 2026 (Principal Associate, Louise Singh) 25 February 2026
Employment Rights Act Series: New trade union law now in force and updated timeline (Principal Associate, Louise Singh) 25 February 2026
Employment Rights Act Series: Redundancy collective consultation: Doubling down on recalcitrant employers by doubling up on protective awards (Principal Associate, Suzanne Nulty and Legal Director, Victoria Duddles) 29 January 2026
Hark! The Employment Rights Act 2025 is nigh… (Partner, Nick Newman and Principal Associate, Louise Singh) 17 December 2025
Employment Rights Bill Series: Four ‘autumn 2025’ consultation launched (Principal Associate, Matt Smith) 24 October 2025
Employment Rights Bill Series: Amendments to zero-hours contracts provisions (Principal Associate, Suzanne Nulty and Principal Associate, Louise Singh) 07 August 2025
Employment Rights Bill Series: Amendments to the Fire and Re-hire provisions (Legal Director, Ross Hutchison) 22 July 2025
Employment Rights Bill series | July amendments: NDA changes and more (Principal Associate, Louise Singh) 13 July 2025
Employment Right Bill Series: Implementation Roadmap – a long and winding road (Principal Associate, Suzanne Nulty and Partner, Mark Landon) 08 July 2025
Employment Right Bill Series: House of Lords Stages completed (Principal Associate, Suzanne Nulty) 26 June 2025
Employment Rights Bill Series: The House of Lords Stages so far (Principal Associate, Suzanne Nulty) 6 June 2025
Employment Rights Bill Series: Employment Rights Bill moves from Commons to Lords (Principal Associate, Suzanne Nulty) 25 March 2025
Employment Rights Bill Series continued (Principal Associate, Suzanne Nulty) 7 March 2025
Employment Rights Bill Series: Zero Hours Contracts and Guaranteed Hours: A Zero-Sum policy? (Principal Associate, Louise Singh) 27 January 2025
Employment Rights Bill Series: Small but significant changes to the statutory sick pay system (Principal Associate, Ashley Powis) 13 December 2024
Employment Rights Bill Series: First set of proposed amendments: what it means and what to expect (Principal Associate, Suzanne Nulty) 6 December 2024
Employment Rights Bill Series: Further rules on fair tipping (Principal Associate, Ashley Powis) 3 December 2024
Employment Rights Bill Series: Dismissal and Re-engagement - Tying the Hands of employers? (Legal Director, Ross Hutchison) 22 November 2024
Employment Rights Bill Series: The Fair Work Agency (Principal Associate, Suzanne Nulty) 15 November 2024
Employment Rights Bill Series: The Pendulum Swings on Industrial Relation (Partner Andrew Forrest and Principal Associate, Louise Singh) 8 November 2024
Employment Rights Bill Series: Day 1 right to claim unfair dismissal (Principal Associate, Suzanne Nulty and Associate, Lauren Barchet) 25 October 2024
Employment Right Bill Series – Flexible Working “Further Flexion” (Principal Associate, Suzanne Nulty) 21 October 2024
The Employment Rights Bill Series: 2024 – What’s in, What’s out, and What’s next (Principal Associates, Louise Singh and Suzanne Nulty) 11 October 2024
