Employment Rights Bill: Key Updates on Zero Hours Contracts, SSP & Trade Unions
11 Mar 2025

The government has published its response to the consultation on zero hours contracts and their application to agency workers. Alongside this, further amendments to the Employment Rights Bill (ERB) have been proposed, covering Statutory Sick Pay (SSP), trade union regulations, and new enforcement powers.

Here’s what you need to know. 👇

 

Zero Hours Contracts & Agency Workers

The ERB already includes complex proposals aimed at protecting zero and low-hours workers across three key areas:

✅ Guaranteed Hours – Workers who meet certain conditions will have the right to a contract reflecting their actual hours worked over a defined reference period (details on this reference period are still pending).

✅ Reasonable Notice of Shifts – Employers must provide fair notice of shifts and any changes.

✅ Compensation for Last-Minute Cancellations – Workers will be entitled to payment if a shift is cancelled, moved, or shortened at short notice.

 

What’s Changing for Agency Workers?

The government has confirmed amendments to extend these protections to agency workers. However, the finer details will be set out in secondary legislation. Here’s what we know so far:

🔹 Responsibility for shift notice – Both employment agencies and end hirers will be responsible for giving agency workers reasonable notice of shifts. If there’s a dispute, a tribunal will decide who is liable.

🔹 Who pays for cancelled shifts? – Agencies will be responsible for compensating workers for cancelled or curtailed shifts, but they can recoup costs from the hirer if they have an agreement in place.

🔹 Shift notifications – The Secretary of State will have the power to introduce regulations on how agency workers should be notified of shifts, cancellations, or changes.

🔹 Guaranteed hours offers – The end hirer (not the agency) will be responsible for offering guaranteed hours contracts to qualifying agency workers.

🔹 Temporary work exception – There will be an exemption for cases where there is a genuine temporary work need, such as seasonal demand.

🔹 Transfer fees & hire periods remain unchanged – The existing rules under The Conduct of Employment Agencies and Employment Businesses Regulations 2003 will still apply.

 

Statutory Sick Pay (SSP) – Key Updates

Big changes are coming for low-paid workers who currently do not qualify for SSP. Under the ERB:

✔️ New Eligibility – Employees earning below the current threshold will now be entitled to SSP at 80% of their average weekly earnings or the standard SSP rate (£116.75 per week), whichever is lower.

✔️ Day-One Right – The waiting period for SSP will be removed, making it a right from day one of employment.

This will extend SSP eligibility to up to 1.3 million workers who were previously excluded.

 

Trade Unions – What’s Changing?

The government is proposing several major updates to trade union rules in the ERB:

🔹 Longer Notice for Industrial Action – The notice period for industrial action will increase from 7 days to 10 days.

🔹 New Fines for Non-Compliance – The Central Arbitration Committee (CAC) will have the power to issue fines for non-compliance with union access rights.

🔹 E-Balloting and Ballot Turnout Rules – The 50% turnout threshold for industrial action ballots will not be repealed immediately—it will require separate regulations and will be introduced alongside e-balloting.

🔹 Industrial Action Mandate Extended – The validity of an industrial action mandate will be extended from 6 months to 12 months before requiring a new ballot.

🔹 Preventing Mass Recruitment to Block Union Recognition – The maximum number of employees in a bargaining unit will be locked in once a union submits its recognition request to the CAC. The number can decrease but not increase during the process.

🔹 Virtual Access for Unions – The ERB will allow trade unions to arrange virtual access to workers (either instead of or in addition to physical access).

🔹 Changes to Political Fund Ballots – Unions will no longer need to ballot members every ten years on whether they want to maintain a political fund. Instead, members will receive a reminder of their right to opt out every ten years.

 

Additional Amendments Published (5 March)

On 5 March, the government introduced further amendments to the ERB, which could have significant implications for employers:

🔹 New Record-Keeping Obligations – Employers will be required to maintain records of annual leave under the Working Time Regulations 1998 and keep them for six years.

🔹 Stronger Enforcement for Underpayments – The government will have new powers to take action on underpaid holiday pay and SSP for up to six years. Employers who underpay will be required to:

• Pay the full underpaid amount to affected employees
• Pay a penalty of up to £20,000 per worker to the government

🔹 Government Support for Tribunal Cases – The government will be able to:

• Bring tribunal claims on behalf of workers
• Provide legal advice, representation, or financial support for cases related to employment law, trade unions, or labour relations

 

What Happens Next?

📌 The third reading of the ERB is set to take place this week, bringing these changes one step closer to becoming law.

These reforms will have huge implications for businesses, workers, and trade unions. If you’re an employer, now is the time to start reviewing your contracts, policies, and processes to ensure compliance.

💬 Need help understanding what these changes mean for you? Give us a call today.

 

Disclaimer: The provisions outlined in this update are subject to change as the Employment Rights Bill progresses through Parliament. Employers and workers should stay informed about further amendments and consult legal professionals for the most up-to-date guidance.