‘Ministers must stick to their guns’ … ‘these changes are draconian’ … ‘a sledgehammer to crack a nut…’ Opinion over the Employment Rights Bill remains divided as the initial raft of amendments become known. We pick comments from the employment sector to reflect current concerns.

Agency worker rules an ‘unwanted burden’

Matt Wort, employment law specialist at Anthony Collins

“Extending the right to guaranteed hours to all agency workers (in addition to those on zero-hours contracts) will bring challenges for employers who rely on atypical workers, but at least there will be greater certainty. Whereas some employers might previously have chosen the rather costly route of using agency workers to avoid the compliance risks associated with zero-hours contracts, this option will no longer be available.

“Employers will have to wait for the detail of the new regime and the government has promised draft regulations, but in the meantime, they should assess the current use of agency workers and zero-hour contracts and consider offering more permanent contracts in the future. The reality is that for many employers in the health and social care sector, the new rules affecting agency workers and those on zero-hours contracts will be an unwanted burden, although the government has promised that it wants only to outlaw exploitative zero-hour contracts and recognises the importance of flexible, but still fair, working patterns.

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“Employers seeking to make 20 or more employees redundant will have to adhere to additional procedural requirements, particularly with regard to employee consultation, and they could attract penalties for non-compliance. While this may help prevent unfair redundancy processes, it’s not helpful for organisations struggling with ever-increasing costs, which might need to make redundancies to remain viable.”

‘Further amendments are needed’

Alexandra Hall-Chen, principal policy adviser for employment at the Institute of Directors

“While any steps to mitigate the impact of the government’s employment reforms on businesses are welcome, the changes announced today do not address the key areas of the reforms which are of particular concern to employers.

“Substantial further amendments to the bill will be required if it is to avoid undermining the government’s growth mission. Our own data shows that directors’ headcount expectations have dropped to lows last seen in the depths of the Covid pandemic. Urgent and substantive action from government is needed to restore business confidence in hiring.”

In February, the Institute of Directors set out four key changes to the Employment Rights Bill, which would significantly soften the negative impact of the reforms on hiring:

• Amend the planned introduction of additional protections against unfair dismissal so that they only come into effect after six months of employment rather than on day one.
• Increase the planned reference period for the entitlement to guaranteed hours to 52 weeks, and make it a right for employees to request, rather than to be proactively offered, a contract reflecting hours regularly worked.
• Retain one waiting day before employees can access Statutory Sick Pay (SSP).
• Retain existing thresholds for statutory recognition of trade unions.

Essential steps moving forward

Vicky Walker, group director of people, at Westfield Health

“We welcome the emphasis on strengthening protections against unfair dismissals and improving flexible working arrangements, particularly for working parents, carers and those with other responsibilities, who make up a substantial portion of today’s workforce.

“By legitimising flexibility as a core employee right, the bill acknowledges the growing need for workers, especially parents, to balance their professional and personal lives without sacrificing productivity. We know that employees who feel supported and trusted in managing their work-life balance are more likely to be engaged, loyal, and committed. For businesses, this helps attract new talent and improve retention—two key objectives for many organisations in today’s competitive labour market.

“The entitlement to paternity leave and the new clause requiring companies with more than 250 employees to publish information about their parental leave and pay policies is an essential step toward achieving gender equity in caregiving responsibilities. This change not only supports fathers and non-birthing parents but also sets the stage for a more inclusive and engaged workforce, benefiting both families and organisations.”

‘Businesses could be left in a legal maze’

Stephen Simpson, principal HR strategy and practice editor at Brightmine

“The government’s planned employment law overhaul is a classic case of ‘one step forward, two steps back.’ On the one hand, stronger protections for workers on zero-hour contracts are long overdue. On the other, the sheer complexity of these new rule’s risks turning good intentions into a bureaucratic nightmare. This is especially true for businesses that rely on seasonal or fluctuating workers, who could struggle to comply due to the sheer complexity of the rules.

“The opt-out for employers with union agreements might encourage collective bargaining, but it also creates a patchwork system where workers’ rights depend on whether their employer strikes a deal with a union. This means two employees in the same industry could have very different protections.

“Without clear guidance and practical enforcement, these reforms could leave businesses stuck in a legal maze – and workers no better off.”

‘Draconian and unnecessary’

Dan Pollard, partner at law firm Charles Russell Speechlys

“This is brilliant news for employment lawyers, but sadly not for employers. After hints that the proposals may be watered down, Labour has doubled down on its commitment to protect workers’ rights at the cost of business.

“The bill gives significant powers to the government of the day to step into employment disputes. This includes the power to issue notices of underpayment for swathes of workers with mandatory penalties of up to 200%.

“The government will also be able to step into any private employment dispute it wishes and employers face having to pay government legal costs. This is frankly a draconian use of the power of the state and will place huge pressure on employers to settle disputes.”

The Fair Work Agency is gaining powers

Richard Jay, employment adviser at WorkNest

“One amendment to the bill proposes that the government would be able to step in where workers are unwilling or unable to bring a claim, if ministers believe there is a case to answer. In my view, a lot is going to depend on funding: can the government really afford to give employees easy access to free legal advice? Can they afford to pursue every claim that is left unbought? What is more plausible is for them to get involved in much more obvious areas where there is a clear public interest – larger scale actions from larger employers, or perhaps to the same degree that the National Minimum Wage is currently enforced.

“The Fair Work Agency will also potentially have powers to issue notices of underpayment for payments in relation to National Minimum Wage, Holiday Pay and Statutory Sick Pay. Additionally, penalties for non-compliance appear to be up to 200% of sums identified in a notice. Under the new Bill, employers are going to have to keep records of holiday compliance for six years. Couple that with the proposed right to enter businesses and private homes (with the latter requiring a warrant) and the fact that obstructing an enforcement office is proposed to be a criminal offence, the Fair Work Agency certainly had some strong powers proposed – even before this amendment.

“What is clear is that if an employer is deemed rogue the objective is ‘tough action’. Businesses must tighten up on their compliance, procedures, policies, and record-keeping in readiness of the Bill.”

‘Punitive legislation’

Dave Chaplin, CEO of contracting authority ContractorCalculator

“There are some concerns around false self-employment, where unscrupulous firms may seek to work around the new rules. While that may occur for a small minority of workers, the worry is that the problem may be overstated, resulting in a sledgehammer approach to crack a nut, thereby damaging genuine self-employment.

“Truly self-employed contractors and consultants have chosen independence over rights, benefits and protections. They are neither vulnerable nor exploited and value their autonomy and flexibility. They do not want to be forced into false employment.

“We need a balanced approach that caters for all if Labour wants to grow our economy, and the truly self-employed have a vital role to play in that mission, left to flourish unhindered by punitive overreaching legislation.”

It’s vital government sticks to its guns

Ben Harrison, director of the Work Foundation at Lancaster University

“At a time of record sickness levels, worker shortages and rising numbers of young people out of work or education, improving job quality is essential. We cannot afford a system that traps people in precarious jobs or pushes them out of work altogether, and so it’s vital that the government sticks to its guns and delivers on its ambition for the Employment Rights Bill in the weeks and months ahead.”

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