Business Leaders Call on Parliament to Accept Worker Rights Modifications
Employment Rights Bill Progresses Through Lords with Industry Support
The Employment Rights Bill, currently at the Report stage in the House of Lords, is making significant strides towards becoming law. After clearing the Committee stage at the end of June, the Bill is expected to return to the House of Commons for consideration of the Lords' amendments before receiving Royal Assent in the autumn of 2025, rather than before the summer recess as originally hoped.
The Bill, which aims to overhaul workers' rights, has seen several significant amendments during its passage. These changes reflect the government’s response to consultations on areas such as statutory sick pay, collective redundancies, fire and rehire practices, industrial relations, and provisions around agency workers' guaranteed hours and notice of shifts. Notably, the House of Lords has recently passed a number of opposition-proposed amendments, indicating active parliamentary scrutiny.
The government has published an implementation roadmap, detailing a phased timetable for when various provisions of the Bill will come into force. Key points include reforms to statutory sick pay from April 2026, measures on fire and rehire and harassment law reforms in October 2026, and the day 1 right to unfair dismissal and changes to collective consultation triggers in 2027.
Industry groups have generally expressed support for the Bill. Matthew Percival, from the CBI, believes the changes suggested by the Lords support the government's mission to grow the economy. UK Hospitality's Kate Nicholls finds the measures proposed by peers as sensible and helpful. Seven industry bodies, including the 'Big Five' business bodies, BRC, and UK Hospitality, have urged MPs to accept House of Lords amendments to the Employment Rights Bill.
However, some industry bodies have expressed concerns about certain provisions. The Institute of Directors found that seven in 10 of its members believe the overhaul would lead to fewer new hires and kibosh the government's hopes of kickstarting the economy. Businesses have warned that other reforms in the Employment Rights Bill, like handing workers a horde of new rights from day one, will harm their ability to take on new staff and leave them vulnerable to costly lawsuits.
Despite these concerns, many industry leaders have praised the amendments. Helen Dickinson, chief executive of the British Retail Consortium, hails the amendments as "positive, practical, and pragmatic." Jamie Cater, from Make UK, urges the government to accept the amendments regarding protection from unfair dismissal and zero hours contracts. Cater suggests a right for employees to request, rather than be offered, a guaranteed hours contract if they are on zero or 'low' hours.
The Labour party, which made delivering the "biggest upgrade to workers' rights in a generation" one of its flagship manifesto pledges in the run-up to last year's general election, has criticised the government's rejections of the changes proposed by peers. The government has stated that these changes would undermine new rights for millions of workers.
As the Bill continues its journey through Parliament, it remains to be seen how the final legislation will balance the needs of businesses and workers. The ongoing consultation phases and phased implementation timeline provide employers with advance notice to prepare for the substantial changes. Law firms tracking the Bill emphasize the scale of reforms and the importance for employers to stay informed of ongoing developments.
- The Employment Rights Bill, currently progressing through the Lords, is not only overhauling workers' rights but also garnering support from various industry groups, such as the CBI and UK Hospitality, who believe the changes will contribute to economic growth.
- The ongoing parliamentary process of the Employment Rights Bill, as it navigates through the House of Commons and receives amendments from both the government and the opposition, highlights the intersection of business, finance, politics, and general news, as the final legislation will significantly impact both employers and employees.
