Last-Minute Amendments Proposed to UK Employment Rights Bill

TOPIC

DETAILS

FIRE & REHIRE

• A key aspect of the government’s proposals and initial draft of the Bill was to end so-called “fire and rehire” practices.
• The Bill initially stated that dismissing an employee
  1. who does not agree to a contract variation, or
  2. to enable the organisation to employ another person, or to re-engage the same employee, under a varied contract to carry out substantially the same duties,
  would be regarded as an unfair dismissal.
• The only exception would have been if the employer could show that the reason for the variation was to eliminate, prevent or significantly reduce, or significantly mitigate the effect of any financial difficulties which at the time of the dismissal were affecting, or were likely in the immediate future to affect, the employer’s ability to carry on the business and in all the circumstances the employer could not reasonably have avoided the need to make the variation. This exception would likely have had narrow application.
• This restriction has been softened. Protection will now be limited to dismissals where the proposed contractual amendment is a “restricted variation.” A “restricted variation” shall include changes relating to reducing pay, performance-based pay measures, pensions, working hours and reducing time off. It shall also include dismissals that seek to provide for new variation clauses covering such restricted changes and anything else the government sets out in further regulations.
• This amendment narrows the restriction to those types of contractual changes that are more likely to significantly impact employees, while not automatically deeming unfair other dismissals brought about to affect other nonrestricted contractual variations. While this is helpful for employers, it remains the case that certain fire and rehire practices (i.e., those that constitute restricted variations) will be heavily restricted moving forward.

NDAs AND CONFIDENTIALITY AGREEMENTS

• A new provision has been introduced that will render unenforceable any provision in a non-disclosure agreement (NDA) or confidentiality clause (e.g., in an employment contract, settlement agreement or COT3 agreement) that purports to restrict the disclosure of allegations of direct or indirect discrimination and discrimination arising from disability (including disclosures about how an employer responds to such allegations). This is already the case with respect to other types of disclosures (e.g., whistleblowing or reporting crimes to the police).
• There is a potential exception to this restriction for certain “excepted agreements.” The meaning of “excepted agreements” will be clarified in forthcoming regulations. We do not expect that employment contracts, settlement agreements or COT3 agreements would fall under this exception.
• Employers should reevaluate their current use of NDAs and confidentiality clauses in other agreements. The use of NDAs and confidentiality clauses to protect, for example, commercially sensitive information, ideas, or intellectual property will be unaffected by this amendment.

BEREAVEMENT LEAVE FOR PREGNANCY LOSS

• The protections for bereavement leave are currently only available to parents whose child is stillborn after 24 weeks of pregnancy. The new amendments will extend this leave to employees who suffer a pregnancy loss before 24 weeks. A more general right to bereavement leave adapted from the right to parental bereavement leave was already included in the Bill. Further details can be expected in the coming months as the government plans to consult on the matter this autumn.
• Bereavement leave shall be a day one right but there are no current provisions for this leave to be paid.

When

Details

SHORTLY FOLLOWING ROYAL ASSENT (i.e., AUTUMN 2025)

• Repealing most of the Trade Union Act 2016 and the Strikes (Minimum Services Levels) Act 2023. Further, the protections against dismissal for taking industrial action shall become effective.

APRIL 2026

• Doubling of the protective award to 180 days for breach of collective redundancy consultation requirements
• Establishing the Fair Work Agency
• Whistleblowing protections (i.e., sexual harassment disclosures constitute qualifying disclosures)
• Removing the Lower Earnings Limit and waiting period on Statutory Sick Pay
• Day one paternity leave and unpaid parental leave entitlements

OCTOBER 2026

• Restrictions regarding the use of fire and rehire
• Duty to inform workers of their right to join a trade union
• Strengthening trade unions’ right of access
• Requiring all employers to take all reasonable steps to prevent sexual harassment of their employees
• Obliging employers not to permit the harassment of their employees by third parties
• The extension to employment tribunal time limits

2027

• The day one right to unfair dismissal protection
• Gender pay gap and menopause action plans for larger employers
• Rights for pregnant workers
• Regulation of umbrella companies
• The new thresholds for collective redundancy
• The changes regarding an employer’s ability to refuse flexible working requests
• New right to bereavement leave
• Rights for zero hours/casual/irregular hours workers