Employment Rights Bill: Key amendments for employers

A raft of amendments to the Employment Rights Bill have been tabled by the House of Lords.  Many are unlikely to progress any further but several proposed by Minister Baroness Jones of Whitchurch are more likely to make it into the final Bill as they have backing from the government. Below are the amendments we expect to make the cut.

Ban on non-disclosure agreements for discrimination and harassment

A major addition will mean that non-disclosure agreements (NDAs) which prevent workers from alleging or speaking about certain work-related harassment and discrimination, will be unenforceable or void. This amendment covers harassment of a worker or a worker’s colleague by either the employer or another employee. Third party harassment does not seem to be included at this stage. 

NDAs are legally binding agreements which prevent disclosure of information. So, this will include any contractual terms in employment agreements as well as confidentiality agreements, settlement agreements and any non-disparagement agreements. Employers will need to review these documents to ensure they do not silence employees who have been victims of discrimination and harassment. Certain “excepted agreements” will be permitted. This represents a step change for employers who will be hoping that settlement agreements, where employees have received specific legal advice around non-disclosure, will be classed as “excepted agreements” but we will need to wait for further clarification from the government here.

This amendment to the Bill is intended to continue the transformation of workplace culture and safeguard employees and to end systemic misuse of NDAs and encouraging a more transparent workplace. 

Bereavement leave for pregnancy loss

Currently employees are entitled to two weeks of bereavement leave if they experience a pregnancy loss after 24 weeks or the loss of a child up to the age of 18. The Bill provided for one week of unpaid bereavement leave for those in a qualifying relationship with the deceased. 

This new amendment extends the right to bereavement leave to those who experience a pregnancy loss before 24 weeks. We expect this to be one week of unpaid leave in line with the Bill, but we know that the government intends to consult further on this area.

Guaranteed pay protection for agency workers

Agency workers were added to those protected by rules around zero hours workers in amendments made to the Bill in March. Requirements have now been proposed to prevent employers reducing the level of pay for an agency worker where an offer of guaranteed hours is made. In general pay, taken as a whole, would need to be at least the same as

• the best conditions they received during the reference, and
• the best conditions of a comparable worker. This is someone of the same level of skill and qualification doing the same or broadly similar work for the employer. If there is no comparator at the agency worker’s place of work you will need to look to comparators in other places.

Will this mean the end of agency workers attracting higher rates of pay? Where there is no local comparator regional pay differences might come in to play. Before employers engage an agency worker they might want to consider if they are receiving a premium because, for example, they are London based. 

It also seems that agency workers hired by the end user will be workers rather than employees.  Whilst this seems helpful, once they are engaged directly, whether they are a worker or an employee will be determined on the realities of the situation. 

Fire and re-hire restrictions

Amendments have been proposed which soften fire and re-hire. A list of restricted variations has been added which means that dismissals would only be automatically unfair where changes were made to:

• Pay
• Measures used to determine performance related pay
• Pension
• Hours of work
• Time off
• Changing times and length of shifts
• Adding a variation clause to an employment contract allowing the employer to vary terms and conditions.
• Other changes which might be added by further regulations

Dismissal for another reason would not be automatically unfair and could be fair depending on the circumstances. Considerations as to what would be fair are also added including whether appropriate consultation has taken place. 

We recommend that employers check whether employment agreements have a variation clause.  Once these rules come into effect an employer will no longer be able to include a variation clause.  We might see more detail around this in further regulations.

Proposals around fire and replace with agency workers and contractors doing broadly like-for-like work have been tightened. A new section means that this would be automatically unfair unless the employer could show it was necessary for the business to continue as a going concern. 

Next steps for the Employment Rights Bill

All the proposed amendments will now be debated by the House of Lords on 14 July, with further sittings pencilled in until 23 July. Once passed by the Lords, the Bill will return to the Commons where it will need to be approved by MPs. Do the volume amendments make it unlikely that the Bill will be passed before the summer recess? We will bring you further updates as they happen.​​​​