Essential Employment Rights Bill updates
Since first being announced in October 2024, the Employment Rights Bill has been progressing through the various steps of the review process in Parliament, including readings, committee stages and reports in the House of Commons and House of Lords. Substantial amendments were made in November 2024 and March 2025. The government’s original timetable anticipated the Bill passing before Parliament broke up for summer and coming into force this autumn.
But in July, the House of Lords unexpectedly proposed some big changes to some important measures in the Bill. That meant further reviews and pushing the timetable back.
What did the House of Lords propose?
The Lords put forward 169 amendments. While many of them were procedural or administrative points, clarifications or on niche areas, some targeted the highest impact ideas, including:
- Unfair dismissal – Setting a six-month qualifying period for employees to be eligible for unfair dismissal rights, instead of it being a day one right, as the government had proposed (or two years, under current law).
- Zero hours contracts – Workers on zero hours contracts having the right to request a contract with predictable hours, rather than employers being obliged to actively offer guaranteed hours, as the government had proposed.
- Zero hours workers – Lords defined ‘short notice’ changes or cancellations of shifts for zero hours workers, entitling affected workers to compensation, as under 48 hours, whereas the government proposed the more general ‘reasonable notice’.
- Fire and rehire practices – Limiting the Bill’s scope of a ban on ‘fire and rehire’ to dismissals relating to ‘restricted variations’, i.e. forcing changes to pay, hours, pensions and holidays, rather than all changes.
What proposals did the House of Commons accept or reject?
Labour had made employment law reform a key part of their manifesto and emphasised their commitment to their proposals on unfair dismissal and zero hours contracts. So unsurprisingly, a lot of the proposed amendments were rejected by the government.
- Unfair dismissal – The six month qualifying period for unfair dismissal was rejected, so this would remain a day one right in the Bill, with more lenient rules in probation periods to be confirmed.
- Zero hours contracts – The proposal for guaranteed hours to be requested by the employee was rejected, so the onus will continue to be on the employer to offer this periodically.
- Zero hours workers – The government rejected the definition of ‘short notice’ being 48 hours and stated that consultation would decide the appropriate timescale, but we already know this won’t be longer than seven days.
- Fire and rehire practices – The Lords proposal to limit the ban on fire and rehire to certain ‘restricted variations’ was accepted in the House of Commons, so this will proceed on the amended basis. A new provision will set out considerations that should be taken into account in deciding the fairness of a dismissal relating to other variations of contract that don’t count as ‘restricted variations’.
- Other changes – the Commons also agreed smaller tweaks, including:
- A ban on confidentiality clauses that stop employees raising discrimination or harassment allegations.
- A clarification that if an employer shortens a shift but still pays for the full time, no further compensation is required.
What happens next?
Now that the House of Commons has confirmed what amendments are agreed or not, the Bill has gone back to the House of Lords for final consideration. That’s expected to be a formality without further amendments arising. Following that, all that remains is for the Bill to receive Royal Assent and officially become law.
We now have confirmation that the House of Lords will review, and most likely accept, the most recently amended version from the House of Commons on 28 October. Shortly after that, it should receive Royal Assent and still pass in early November. From there the various measures in the Bill will come into force on a staggered basis between now and 2027.
We’ll be sure to keep you updated as soon as the Bill passes and becomes the Employment Rights Act 2025. So, keep an eye out for our updates explaining exactly what it all means, when key provisions will come into force, and how businesses can prepare.
If you’ve got any questions about any of these changes, get in touch on your free advice line via 0345 844 4848*.
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