In October 2024, the Government published the Employment Rights Bill, which proposed significant reforms to UK employment law. Last week, the House of Lords proposed several amendments to the Bill. Here, we summarise the key proposed changes and examine what this means for employers.
Ban on Non-Disclosure Agreements (Including Settlement Agreements) Covering Workplace Harassment and Discrimination
One of the most significant amendments would render confidentiality clauses in contracts between employers and workers (including settlement agreements) unenforceable if they prevent workers from alleging or disclosing harassment and discrimination. However, these provisions do not extend to allegations involving a failure to make reasonable adjustments. If passed, the change would apply to both current and former workers. Regulations could later be extended to include contractors, trainees, and those on work experience.
Importantly, this would not amount to a blanket ban on settlement agreements involving allegations of discrimination or harassment. Such agreements may still include terms where the employee waives their right to pursue claims related to those issues. However, any confidentiality clause that attempts to prevent the employee from discussing their experience would be unenforceable.
The effect of this would remain to be seen, but one unintended consequence could be that employers may find settlement agreements less appealing, especially in cases where allegations of discrimination or harassment are disputed, since they would no longer be able to rely on confidentiality clauses to protect their reputation. Conversely, employees may be unwilling to enter into settlement discussions where employers are not bound by confidentiality provisions of their own.
Revised Fire & Rehire Provisions
Originally, the Bill sought to prevent the use of ‘fire-and-rehire’ tactics – that is, firing and re-hiring employees on lower pay or less favourable contract terms. Under the initial draft, employers could only implement such changes if they could demonstrate that doing so was necessary to avoid “imminent financial failure” – otherwise, dismissal could amount to automatic unfair dismissal.
The proposed amendments soften these restrictions and would make it easier for employers to lawfully use the ‘fire and re-hire’ practice in some situations:
- The ban would only apply to ‘restricted variations’, including changes to pay, pension, working hours, holiday entitlement, and anything else set out in secondary legislation. It would also cover clauses giving employers a blanket right to make contract changes.
- Minor contractual variations unrelated to pay, working hours, or work location would be excluded from the automatic unfair dismissal provisions.
- If an employer demonstrates the ‘serious financial distress’ defence, the tribunal would then consider the usual reasonableness test for unfair dismissal claims.
- Dismissals related to non-restricted changes would not be deemed automatically unfair. Routine contractual tweaks would fall within unfair dismissal but would be subject to stricter procedural terms.
Extended Family Leave Rights - Miscarriage Leave
An amendment proposes that bereavement leave would be expanded to cover parents who suffer a miscarriage in the first 24 weeks of pregnancy. Currently, parental bereavement leave only applies in cases where a child under 18 dies, or where stillbirth occurs after the 24th week of pregnancy.
Other Changes
There were other changes suggested which are not (currently) supported by the Government and are therefore unlikely to pass. These are:
Whistleblowing
- Whistleblowing protections would be extended to cover mismanagement of public funds, abuse of authority, and other areas set out in the Regulations.
- To qualify as a protected disclosure, it must be in the public interest. Currently, it is enough that the worker reasonably believes it to be in the public interest.
- A new regulatory body, The Office of the Whistleblower, would be established as the primary channel for disclosures and support.
- A new criminal offence for subjecting whistleblowers to a detriment intentionally or recklessly, with penalties of up to 10% of an employer’s global annual turnover.
- Certain employers would be required to take reasonable steps to investigate protected disclosures.
Changes to Zero-Hour Worker Rules
- Workers would have the right to request guaranteed hours, rather than employers being obliged to offer them. Employers would only need to consider requests. The right would apply if the worker averaged at least 8 hours per week over a rolling 26-week reference period.
- Employers would be exempt from short-notice cancellation payments if a shift is cancelled at least 48 hours in advance, providing greater certainty when scheduling shifts and reducing employers’ compensation costs.
When Will These Changes Happen?
This legislation is currently being debated in Parliament and may be subject to more amendments before it becomes an Act. The Bill will lead to several consultations, which will address reforms contained in the Bill. In July 2025, the Government published its “roadmap” for delivering the changes, which sets out a phased delivery plan for the upcoming changes. The majority of reforms will take effect no earlier than April 2026, with some changes not expected until 2027.
How Can We Help You?
Tozers can assist you in navigating these changes smoothly. Our team of experts is well-versed in employment law and can provide tailored advice to ensure compliance with the new regulations. Contact us today.
