On Tuesday 4 March the Government tabled amendments to the Employment Rights Bill following weeks of consultation and responses from business groups, trade unions and wider civil society.
These amendments demonstrate the Government’s commitment to working in partnership with businesses and trade unions to ensure the plan to Make Work Pay is firmly pro-business and pro-worker.
Responses to five consultations ranging from zero-hours contracts to Statutory Sick Pay will also be published which show how the Government has listened to the views of stakeholders.
The Government’s Plan to Make Work Pay is a core part of the mission to grow the economy, raise living standards and create opportunities for people across the country. These amendments will deliver on the Plan for Change by tackling the low pay, poor working conditions and poor job security that has been holding the UK economy back.
This landmark Bill will extend the employment protections already given by the best British companies to millions more workers. This will put the UK back in step with competitors in other advanced economies, who are already acting to adapt to the changing world of work.
The Bill’s impact assessment, which was published last year, showed that many of the policies within the Employment Rights Bill could help support the Government’s Mission for Growth. It concluded that that the package could have “a positive but small direct impact on economic growth” and will “help to raise living standards across the country and create opportunities for all.” This is the result of a pro-business, pro-worker, approach which is going to help usher in a decade of national renewal.
“For too long millions of workers have been forced to face insecure, low paid and irregular work, while our economy is blighted by low growth and low productivity.
“We are turning the tide – with the biggest upgrade to workers’ rights in a generation, boosting living standards and bringing with it an upgrade to our growth prospects and the reforms our economy so desperately needs.
“We have been working closely with businesses and workers to progress this landmark bill and deliver our Plan for Change – unleashing growth and making work pay for everyone.”
“Past Governments’ low growth and low productivity economy simply did not deliver what the UK needs, which is why we are choosing stability, investment and reform, not chaos, austerity and decline. This is why our mission to grow the economy as part of our Plan for Change is based on putting more money in working people’s pockets by making wages fairer and work more secure.
“Many businesses already have worker friendly practices in place and can attest to the positive impact they have on retention, productivity and job satisfaction. We want to go further and untap the UK’s full potential by attracting the best talent and giving business the confidence to hire to help the economy grow.”
The amendments carefully consider different views and needs of workers, businesses and the whole economy and looks to deliver measures that support the mutual interests required to drive a growing, modern economy. We are delivering reform through our Plan for Change to create a decade of national renewal, meaning increased living standards across every part of the UK and putting politics back in the service of working people.
All workers, including up to 900,000 agency workers in the UK, should be able to access a contract which reflects the hours they regularly work. These amendments will ensure that agency work does not become a loophole in our plans to end exploitative zero hours contracts. They will offer increased security for working people to receive reasonable notice of shifts and proportionate pay when shifts are cancelled, curtailed or moved at short notice – whilst retaining the necessary flexibility for employers in how they manage their workforces.
The Government will increase the maximum period of the protective award from 90 days to 180 days and issue further guidance for employers on consultation processes for collective redundancies. Increasing the maximum value of the award means an Employment Tribunal will be able to grant larger awards to employees for an employer’s failure to meet consultation requirements. We want to enhance the deterrent against employers deliberately ignoring their collective consultation obligations and ensure it is not financially beneficial to do so.
The government is updating the legislative framework in which trade unions operate to align it with modern work practices. We are ensuring industrial relations are underpinned by collaboration, proportionality, accountability, and a system that balances the interests of workers, businesses and the wider public, with further details in the consultation response.
The Government will ensure the safety net of Statutory Sick Pay is available to those who need it the most, making it a legal right for all workers for the very first time. Up to 1.3 million employees on low wages who find themselves unable to work due to sickness will either receive 80 per cent of their average weekly earnings or the current rate of Statutory Sick Pay – whichever is lower. We are also ensuring employees have a right to Statutory Sick Pay from the first day of sickness absence, so they are able to take the time off they need to recover and stay in work rather than risk dropping out altogether. The changes will also reduce the amount of people going to work when ill and therefore the spread of infections in the workplace – boosting productivity and benefiting businesses.
The Government will act to ensure that workers can access comparable rights and protections when working through a so-called umbrella company as they would when taken on directly by a recruitment agency. Enforcement action can be taken against any umbrella companies that do not comply.
A strong package of workers’ rights and protections goes hand in hand with a strong economy because a secure workforce will be more productive and have more confidence to spend in the economy. This contributes to growth – both through the work that people do, and the money that they spend.
As well as creating protections for people at work, the Government is determined to create a modern economy that works for businesses and workers alike. We are delivering these reforms collaboratively, pragmatically, and in a reasonable timeframe where businesses can prepare.
For businesses to thrive they must operate on a level playing field. The Fair Work Agency will take strong action against rogue employers that exploit their workers, and it will provide better support to the majority of businesses who want to do right by their staff.
The Government will continue to hold continuous extensive engagement as we develop our Plan to Make Work Pay and as the details of these polices are developed.
“Employers will be relieved to see some amendments, at what is clearly a milestone moment for Government. It has consulted business – and this is reflected in some of the decisions on the future shape of the legislation. There is much here to welcome as sensible moves that will help ensure that employment works for both the business and the individual, including the nine-month statutory probation period and the promise of a light touch approach, as well as simplifying rules on collective consultation.
“But businesses remain cautious, and it is important to continue ensuring the Bill strikes the right balance. Employers will look forward to hearing, engaging with and shaping further detail. The government must continue its positive approach to engagement with firms and remain open to changes. Doing so will ensure this legislation is proportionate, affordable, and right for both firms and their employees.”
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05.03.2025
