A series of significant amendments were made to the Employment Rights Bill (ERB) last week, covering key areas such as the watering down of fire and re-hire, changes to NDAs, extending bereavement leave, and changes for zero hour and agency workers. This article explores the main considerations for employers and employees.

Fire and re-hire

Restricted variations

The ERB has narrowed what changes to an employment contract can trigger automatic unfair dismissal claims. This is a change from the original position that any change to a contractual term would give rise to an automatic unfair dismissal claim (although there was an exception for businesses in severe financial difficulties).

The amendments mean that a dismissal will now only be automatically unfair if the change, or one of the changes, is a “restricted variation”. “Restricted variations” include changes to:

• pay (excluding certain types such as expenses);
• pensions;
• working hours;
• holiday entitlement;
• shifts and duration;
• any terms specified in future regulations (a catch all to fill any gaps unintentionally left); and
• allowing employers to make a restricted variation without the employee’s agreement (an anti-avoidance measure).

Whilst these “restricted variations” prevent the use (or misuse) of new variation clauses, any existing variation clause in an employment contract will remain valid. Employers will therefore want to review existing employment contracts and consider whether a variation clause is needed before the changes bite to allow flexibility.

Any changes that result in an employee’s dismissal which are not “restricted variations” will be assessed in accordance with the ordinary fairness tests. The tribunal will also consider the reason for the variation, any consultation process, and incentives offered. Therefore, whilst the changes to the ERB water down protection for employees, any changes which are not “restricted variations” will still need to be introduced fairly.

Replacement of employees with people who are not employees

New amendments to the ERB mean that a dismissal will be automatically unfair if the reason an employer replaced an employee, was to replace the employee with someone not employed, such as a contractor or agency worker, on a like-for-like basis. This strengthens existing redundancy protections for employees.

There will be a limited exception for employers facing financial difficulties or where replacement was unavoidable. However, employers will need to be mindful of the risk of automatic unfair dismissal and revisit potential strategies where contractors or agency workers are used as cost-saving measures.

Non-disclosure agreements (NDAs)

NDAs (that is any agreement between an employee and a worker which contains confidentiality provisions, such as an employment contract or settlement agreement), will be void if it prevents the worker from making an allegation or disclosure of information relating to certain work-related harassment and discrimination. However, NDAs protecting commercial confidentiality will still be permitted.

“Discrimination” under the ERB applies to direct discrimination, indirect discrimination and discrimination arising from disability. It does not specifically include a failure to make reasonable adjustments or victimisation which is peculiar.

In recent years, there has been an increased demand to revisit NDAs as the government wants to ensure that victims can freely speak about their experiences and ensure that witnesses are able to openly support victims. This assists workers in breaking cycles of silence for discrimination and harassment cases and may have the effect of preventing early settlement of such claims. Both employees and employers will therefore be mindful of privacy and reputational risks.

To proactively address these changes, employers should begin reviewing settlement agreement and employment contract templates to ascertain whether the existing confidentiality provisions within those templates would be rendered void following the implementation of the ERB.

Bereavement leave

Bereavement leave will be extended to cover pregnancy loss, including stillbirth or miscarriage within the first 24 weeks of pregnancy. It is not yet clear whether this leave will be paid (although it is assumed unpaid). This will likely arise in further consultation in Autumn 2025 before the law comes into effect in 2027. Many employees are encouraged to see these compassionate amendments be introduced to help support them during extremely difficult circumstances. Whilst not implemented yet, employers may wish to consider revisiting policies to proactively support employees.

Zero-hour and agency workers

Although not proposed by the government, amendments to the ERB from the opposition include that a worker will have the right to request guaranteed hours (in reverse to the original position that an employer would have the ability to offer guaranteed hours). That right to request guaranteed hours applies where a worker has worked at least 8 hours in a 26-week reference period. The mechanism for making such a request is not yet detailed in the ERB which is unhelpful to both employers and employees.

A further proposed amendment (again, not government backed) is to allow an employer to cancel a shift with 48 hours and not be obliged to make a payment to that worker for a cancelled shift. This proposed amendment will be welcomed by employers, allowing the flexibility intended by these working arrangements, but will likely cause some frustration for workers who were to be given greater job security under the provisions of the ERB.

In terms of guaranteed hours for agency workers, government backed reforms would mean that an end-hirer must make a guaranteed hours offer to agency workers on terms which are no less favourable than those arrangements they were working on during the relevant reference period, or, are no less favourable than comparable workers at the end of the relevant reference period. There will not be a new initial reference period in relation to the same agency worker. If the agency worker accepts the guaranteed hours worker, they will become a worker (not an employee). This is still of course subject to the usual employment status tests. Given these changes, end-hirers will receive greater scrutiny to ensure the guaranteed hours offer is compliant, which is difficult given the nature of assignments provided to an agency worker. However, for workers, this will be a welcome amendment to allow for more stable working patterns.

Whistleblowing

Proposed amendments (which are not government-backed) introduce a new Office of the Whistleblower. The Office of the Whistleblower will:

• set, monitor and enforce minimum whistleblowing policy standards, procedures and reporting structures;
• provide an independent reporting service;
• issue enforcement and redress orders; and
• prevent the exercise of NDAs that prevent disclosures.

However, non-disclosure will be permitted in NDAs where if it protects commercial confidentiality or provides whistleblower anonymity.

If an employer were to dismiss or submit a whistleblower to a detriment, an individual can be fined 10% of their gross income (not exceeding £50,000). Penalties for an employer or organisation could reach up to 10% of the entity’s annual global turnover.

While these amendments may not pass immediately, or at all, they reflect growing appetite for stronger whistleblower protections. Robust, transparent reporting structures will be increasingly expected. These changes would create a more secure route for whistleblowers and introduce strong deterrents for retaliation.

SSP

Lastly, there is a proposed amendment which would allow the Secretary of State to establish a rebate scheme for small and medium sized enterprises. However, this proposal is not government-backed.

How we can help

While not all amendments are guaranteed to become law, many are likely to shape future employment practices. The ERB intends to introduce a new era of accountability, transparency, and protection—employers who adapt early will be best positioned to navigate the changes. If you would like any further advice on what the ERB changes mean for you, please contact a member of our employment team.