Employment Rights Bill Series: The House of Lords Stages so far

Since entering the House of Lords for its First Reading on 14 March 2025, the ERB has received much scrutiny. From the outset there were echoes of the dissatisfaction and concerns expressed by others about the apparent haste with which the Bill was drafted, in order to meet the government’s self-imposed 100-day deadline. As previously reported this was said to have resulted in a lack of important detail in the Bill. Consequently, a vast number of amendments have been proposed, during the Bill’s Parliamentary journey, in an attempt to add some of that crucial detail. 
  
The Whole House Committee held the first of its 8 sittings on 29 April 2025; there have been 5 so far and the final one is scheduled for 10 June 2025.  

In overview, of some of the key developments so far are:

Guaranteed hours

Perhaps unsurprisingly, in light of their complexity and the practical challenges they are likely to throw up, many changes tabled relate to the low and zero-hours contract protections proposed by the ERB. 26 amendments were proposed by the government. 

Many of these are technical amendments adding details such as: 

• the right of a deceased worker’s or employer’s personal representative to continue to claim or defend a claim after their death;
• ensuring annualised hours contracts are covered by the ERB and introducing a relatively complex calculation to apportion annualised hours throughout the reference periods within the year;
• adding an exemption to the need to explain the reason for a cancelled or curtailed shift where there is a national security, data protection, confidentiality of commercial sensitivity issue in doing so.  

There have also been changes moved to other relevant legislation to ensure the ERB provisions work effectively with other Acts and regulations; for example, changes to the Employment Tribunals Act 1996 are designed to ensure that: 

• agency staff can be awarded compensation in the same way as other workers in terms of the payments for short notice shift changes / cancellations rights afforded by the ERB; and
• the government will be able to recoup benefit payments made to workers who had to claim benefits because they were not properly paid by their employer in accordance with the ERB guaranteed hours provisions. 

Complaints that the guaranteed hours provisions are unworkable for retail, hospitality, tourism, health and social care, small employers, start-ups and scale-ups, went unheeded and the government’s proposals went through in accordance with their own original proposals and subsequent amendments. 

SSP, tips and gratuities, parental, paternity and bereavement leave

All current ERB proposals on these provisions were approved, unamended, following debate at the third sitting on 13 May, as no government amendments were proposed, and all opposition-proposed amendments were withdrawn (which is not unusual). 

Pressure to share the draft implementation plan for the Bill also went unanswered during the sittings to date. 

Fire and Re-hire 

In the House of Lords’ Joint Committee’s fifth sitting on 21 May, the government rejected strong calls to amend its proposed blanket restriction on fire and re-hire. Despite calls from business and employment lawyers to temper the provisions to allow employers to follow a fair fire and re-hire process where reasonable circumstances make that necessary, akin to the technical or organisational reasons allowed within the TUPE regime, the government refused.  This means that employers will be exposed to litigation risk where efforts to reach agreement with employees have failed, no matter how unreasonable the employee’s refusal might be. 

The only circumstance where a dismissal for refusing to accept proposed new contractual terms can be fair, will be where the employer can convince a tribunal that its business faced financial ruin if it did not dismiss employees who refused to voluntarily agree to the new terms. 

Other ERB Developments – Government response to the Business and Trade Committee 

Alongside the Sittings and debates in the House of Lords, other developments have taken place. On 06 May, the government responded to the Business and Trade Committee Report from March, which we summarised in a previous Insight. 

In its response, the government essentially deflected several of the Committee’s concerns about the lack of specificity in various parts of the Bill by saying it is aware of the need for clarity and will provide this in secondary legislation following careful consultation where necessary. Some specific responses included: 

The Fair Work Agency – the government committed to appropriate funding for the Fair Work Agency and clarified that the Fair Work Agency will not be responsible for equality enforcement, which will remain the remit of the EHRC. 

Employment status review - Review and / or reform of the three-tier employment status remains a longer-term goal for the government and will not be brought forward alongside the ERB reforms, as suggested by the Committee, due to its significance and far-reaching implications. 

Trade unions – the right for unions to have digital access to employees has been added to the Bill, as requested by the Committee, but the government has gone further to also provide that digital access cannot be used by an employer as a reason to refuse physical access as well. The government has also extended the time period for complaints about recognition ballots and will consult on further possible changes to strengthen the fairness requirements during the recognition balloting process and consolidate these in a revised Code of Practice in due course. 

Modern Slavery and forced labour in supply chains – the government is considering how to strengthen the existing Modern Slavery Act 2015 reporting regime.

Next Steps

Once the House of Lords Committee stages are concluded and reported upon at a Third Reading, the Bill will return to the House of Commons for the Lords’ amendments to be considered, debated and, we expect, ultimately agreed. At that point, it can be sent for Royal Assent.  

Previous insights in our ERB Series

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