What’s happening?
In October 2024, the government began several 6-week consultations as part of its plan to Make Work Pay. On 4 March, the government published its responses and confirmed several key amendments to the Employment Rights Bill (ERB). As a reminder, the ERB is still subject to parliamentary approval and is estimated to come into force at some point in 2026 so we will provide further updates when this happens.
This article is part of a mini-series where we are exploring the government’s recent responses to the various ERB consultations. You can find our other articles in the series here:
- Make Work Pay – Statutory Sick Pay
- Make Work Pay – Umbrella Companies
- Make Work Pay – Trade Unions
- Make Work Pay – Zero Hour & Agency Workers
However, in this article we are focussing on some of the key changes being made to the ERB in relation to Collective Redundancy & Fire and Rehire.
Why is this important?
The ERB already makes significant amendments to collective redundancy legislation, most notably by amending TULRCA 1992 so that the threshold for collective redundancies (currently set as 20 or more redundancies within a 90-day period) is calculated by looking at redundancies across the entire business rather than at a single location.
Following consultation, the government is now also doubling the maximum period of the protective award from 90 days to 180 days.
There are some (small) silver linings for employers. Firstly, whilst the government consulted on introducing interim relief for employees (where they can show they have a good chance of showing that the employer breached their obligations), they have decided against introducing this as a measure. They have determined it would increase pressure on tribunals, employees and employers and would be too challenging and complex to implement in practice.
Secondly, the government confirmed that it felt the increase in the protective award, combined with the current 25% uplift in award for failure to follow the Code of Practice would be a sufficient deterrent to employers. It is therefore not planning to increase the 25% uplift at present but will monitor the level of compliance and consider further measures if there is insufficient deterrent.
Finally, to assist employers, the government will be issuing further guidance on the consultation process for collective redundancies and updating the Code of Practice on Dismissal & Re-engagement in due course.
What should you do?
Stay Tuned: These amendments are still subject to consultation. We will continue to update you of amendments as we receive them and will confirm the final position when the ERB is officially passed.
Prepare: Review how the changes may impact your business financially and consider whether changes will be needed to update your policies or procedures following further updates to the Code of Practice.
Disclaimer
This information is intended for general informational purposes only and does not constitute legal advice. We recommend seeking professional advice before taking any action on the information provided. If you would like to discuss your specific circumstances, please feel free to contact us on 0800 2800 421.
