As the House of Lords concludes its report stage of the Employment Rights Bill having implemented several significant amendments, we thought this would be a helpful moment to provide you with an update on a number of the recent changes to the Bill.
The Bill contains a wide-ranging set of changes to employment law including in the areas of unfair dismissal, sick pay, zero-hour contracts, fire and re-hire, industrial relations, flexible working, sexual harassment, collective redundancy and enforcement measures with the creation of the Fair Work Agency.
Some of the amendments to the Bill published on 23 July have Government backing and are likely to pass and others lack Government backing but are interesting.
The third reading of the Bill in the House of Lords is scheduled for 3 September. The Bill will then return to the House of Commons for consideration of the amendments made by the House of Lords.
First, the ones with Government backing include:
1. Non-disclosure Agreements
A notable new addition to the Bill, is a provision concerning the use of confidentiality and non-disclosure agreements (“NDAs”). This proposal is backed by the Government, which issued a supporting press release on 8 July (see here).
Under the new clause, any term – whether in an employment contract or a settlement agreement – that seeks to prevent a worker from making allegations or disclosures relating to harassment or discrimination (as defined in the Equality Act 2010) will be void. This includes disclosures about how the employer responded to the complaint.
The provision applies to confidentiality clauses in any agreement, (not just employment contracts), that seeks to prevent a worker speaking about an allegation of harassment or discrimination. It covers both current and former workers, and may be extended by future Regulations to include contractors, interns, trainees and individuals on work placements.
It protects disclosures whether the alleged conduct was carried out by the employer or another worker, and whether the individual making the disclosure was the direct subject of the behaviour or is speaking out on behalf of someone else.
The Government has positioned this reform as part of a broader push to tackle the systemic misuse of NDAs and to foster a more transparent workplace culture.
For employers, this marks a significant shift. Standard confidentiality provisions used in contracts, settlement agreements and HR policies would require urgent review if this amendment becomes law. Attempts to limit disclosures relating to equality issues may be unenforceable and could expose the organisation to litigation and reputational risk.
As drafted, the clause makes clear that relying on standard NDAs to restrict such disclosures will render the relevant provision void in so far as it relates to harassment or discrimination. However, this may result in unintended consequences, including a reluctance among some employers to settle harassment or discrimination claims where confidentiality can no longer be assured. Further consultation is needed in this area to review the different issues that arise for all parties involved.
2. Fire and rehire
The Bill provides that any dismissal of an employee for refusing to agree to a variation of their contract will be automatically unfair, unless the employer can show that (a) the changes are necessary to address financial difficulties, and (b) that it has complied with a statutory checklist, which includes consulting with the employee about the contractual changes.
The amended section of the Bill includes the following:
- Restricted variations: a dismissal will only be automatically unfair if the employee did not agree to a “restricted variation”. A “restricted variation” would be any change relating to pay, pension, hours of work, holiday entitlement, anything else set out in new Regulations, or a new contractual term permitting the employer to make a variation of any of the preceding terms.
- Non-restricted variations: are to be dealt with under the ordinary unfair dismissal rules. However, a tribunal would still need to consider whether the dismissal was fair or unfair by reference to a new six-point statutory checklist.
- Replacing an employee with an agency worker or self-employed contractor: will be automatically unfair unless the reason for doing so was to address financial difficulties and the employer could not have reasonably avoided replacing the employee. Further a dismissal in this situation will not be automatically unfair if the main reason for the dismissal was that the business’s requirements for the employee’s role had ceased or diminished or were likely to in the future.
- Place of work redundancies: are not to be treated as automatically unfair.
The Government is due to consult on the Regulations concerning fire and rehire in Autumn 2025.The new laws on fire and rehire are due to take effect in October 2026.
3. Bereavement Leave
The Bill has also been amended to extend statutory bereavement leave to cover pregnancy loss.
Under the new provision, employees who have experienced pregnancy loss before 24 weeks’ gestation will be given the legal right to at least one week’s bereavement leave. Currently this right only applies after 24 weeks’ gestation.
The exact entitlement to be given to employees who lose a pregnancy before 24 weeks will be specified in regulations and is not expected to come into effect until April 2027.
Second, ones without Government backing include:
1. Unfair dismissal rights
The House of Lords has amended the Bill to reduce the qualifying period from two years to six months for applicable unfair dismissal rights. This goes against the Government’s intention to make these unfair dismissal rights a “day one” entitlement.
The Government will likely reject the House of Lords’ amendment once the Bill returns to the House of Commons, given the “day one” right to protection from unfair dismissal formed part of the Government’s election manifesto. However, the clamour from “Business” to accept this particular change is likely to be huge and persuasive. Expect a lot of noise and debate on this one!
The Government noted at the beginning of July that reforms to unfair dismissal rights are not due to take effect until 2027.
2. Whistleblowing regime
The Bill has been amended to include a new clause entitled “Regulations to protect whistleblowers”, which states subsequent regulations would be made as follows:
- To extend circumstances in which an employee is considered unfairly dismissed after making a protected disclosure; and
- to require employers to take reasonable steps to investigate any disclosure made to them under the relevant existing whistleblowing legislation.
However, these provisions are applicable to any employer with:
- 50 or more employees;
- an annual business turnover or annual balance sheet total of £10 million or more;
- operations in financial services; or
- vulnerabilities in other respects to money laundering or terrorist financing.
The new clause also specifies that the new regulations are to be made within six months of the day on which the Employment Rights Act is passed.
In its July 2025 roadmap, the Government has confirmed that measures that will take effect in April 2026 will include whistleblowing protections. Therefore, we await the response from the House of Commons on the provisions set out above.
3. Zero-hours contracts
The Bill contains a number of provisions aimed at reforming the legal framework relating to zero-hours and low-hours workers. The House of Lords has amended the right for qualifying workers to be offered guaranteed hours to include the wording “if requested by an employee”.
The amended Bill also includes a definition of “short notice” in relation to cancelled shifts. This states that employers would not be required to make cancellation payments where the shift is withdrawn with at least 48 hours’ notice.
Again, without backing from the Government these amendments are unlikely to pass. If implemented, these changes are unlikely to take effect before 2027.
4. Right to be accompanied by a certified professional
The revised Bill includes a new provision that would permit employees to be accompanied to a disciplinary or grievance hearing by a person who has been certified by a professional body. The meaning of “professional body” would be set out in new regulations.
5. Trade union reform
The House of Lords approved a non-government amendment, tabled by Conservative peer Lord Sharpe of Epsom, which would reinstate the 50% turnout threshold required for trade unions to proceed with industrial action. Under the previous draft of the Bill, this threshold was to be removed, with a simple majority of votes cast being sufficient.
As with other opposition-led amendments, this change is not supported by the Government and is therefore unlikely to survive when the Bill returns to the House of Commons. However, again, it is likely to provoke an interesting debate.
Fox Williams will continue to provide updates on the Employment Rights Bill ahead of it becoming law following Royal Assent, which is anticipated in Autumn 2025.
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