Much of the Employment Rights Bill ("ERB") deals with strengthening collective rights and making significant changes to the trade union recognition framework. Consultations on both strengthening remedies against abuse of rules on collective redundancy, fire and rehire and creating a modern framework for industrial relations took place late last year. The UK government's response to these (and other) consultations has now been published, alongside an updated amendment paper.
Collective Redundancy and Fire and Rehire
One of the big changes contained in the ERB, as it was first presented to Parliament, was the proposal to alter the way proposed redundancies are counted for the purposes of triggering collective consultation obligations. Currently, the duty to collectively consult is triggered where employers propose 20 or more redundancies "at one establishment" within a 90-day period. The ERB proposed removing the words "at one establishment", meaning that multi-site businesses were likely to trigger the duty more often, and they would have to keep an ongoing overview of proposed redundancies at every establishment on a rolling basis. There were also concerns about how employers would carry out that consultation - would they need to bring all employee representatives together to reach a single agreement, which would apply across all affected establishments irrespective of how geographically remote (and in terms of the nature of each establishment) they may be from one another?
Employers will be pleased to see that the proposal is not proceeding as originally planned, with the obligation to consult continuing to be triggered where 20 or more redundancies are proposed, within a 90-day period, "at one establishment". However, the status quo will not remain, as an amendment to the ERB will introduce an alternative, higher threshold triggering collective redundancy where employees are being made redundant at more than one establishment. Details of this are to be set out in regulations, and, as yet, no indication has been given as to what the new threshold will be.
So, while the trigger for collective consultation across a whole business will now be more than 20 proposed redundancies, the new alternative threshold will still mean that collective consultation is triggered more often and with multi-site businesses still needing to track redundancies across different sites. Employers will also be looking for guidance on how to avoid unintentionally breaching the new threshold. Given whatever that threshold is, if a new batch of redundancies results in it being met, then any redundancies that took place within the previous 90 days will retrospectively be seen as having required collective consultation to be carried out. Given the new maximum protective award, this could result in significant liabilities for an employer.
Some concerns around the practicalities of carrying out multi-site consultations have been addressed with new amendments to the ERB confirming that the employer does not need to consult all employee representatives together, nor is it required to reach the same agreement with all of the representatives. This will be welcomed by employers. Employers will also welcome the decision not to proceed with the proposal to increase the minimum consultation period when 100 or more redundancies are proposed, from 45 to 90 days.
Protective Award Increase
Tied into the collective consultation requirement is the potential liability to pay a protective award to employees should the employer fail to carry out collective consultation either properly or at all. Following the consultation on strengthening remedies, the maximum protective award will be increased from 90 to 180 days. This is not subject to the statutory cap on a week's pay, instead referring to gross weekly pay for each employee. In fire and rehire situations, there is also the potential for a tribunal to apply an uplift (or reduct) of up to 25% should the Statutory Code of Practice on Dismissal and Re-engagement (the "Code") not be complied with. Tribunals retain the ability to exercise discretion over the award that is made, taking into account what is just and equitable, considering the seriousness of the employer's default.
The UK government has confirmed that the Code will be updated to reflect the terms of the ERB and they intend to seek views on how this will be done during the course of this year.
Interim Relief
In addition to increasing the maximum protective award, the UK government had also considered introducing "interim relief" in fire and rehire and collective redundancy situations. Following the consultation, this option will not be pursued at this time.
Modern Framework for Industrial Relations
In terms of timescales, it is the changes to the industrial relations framework that will come first, with the Strikes (Minimum Service Levels) Act 2023 being repealed immediately upon the ERB receiving Royal Assent and then the majority of the Trade Union Act 2016 being repealed two months later.
Following the consultation, the intended changes to the current legal position include:
- The new union right of access to the workplace extended to include digital access and a fast-track route within the Central Arbitration Committee ("CAC") for access agreements to be achieved.
- Secondary legislation will be used to introduce a framework for CAC fines for breach of the right of access.
- Introducing e-balloting.
- The current 14-day notice requirement for industrial action being reduced to ten days (so more than the seven-day period initially proposed).
- Reduction in the information required in ballot and industrial action notices.
- Expiry of union member mandates for industrial action will increase from six to twelve months from the date of the ballot
- Changes to rules around unfair practices, making it easier for unions to bring related complaints during recognition applications.
The response also confirms that the proposal to repeal the 50% industrial action turnout threshold will not be implemented immediately. Instead, it will be done by regulation, with the intention being that enactment will coincide with the introduction of e-balloting. Further consultation is also planned on the repeal of the 50% industrial action ballot turnout threshold, delivery of e-balloting and workplace balloting, and reducing admissibility requirements for statutory trade union recognition ballots.
What's Next?
It seems likely that the ERB will receive Royal Assent in July 2025. However, given the amount of further consultation required, not only on the issues addressed above but also on other aspects of the ERB, we are still some way off knowing exactly how employment law will look in 2026 and beyond.
