The Employment Rights Bill has reached a critical milestone in the House of Lords. With major amendments now agreed, employers must prepare for sweeping changes to union recognition, zero-hours protections, and annualised hours contracts. We break down what’s new, what’s next, and why it matters.

Published 1 July 2025

What amendments have been made during the Committee Stage?

There are five stages to the passage of a Bill through the House of Lords, of which the Committee Stage is the third.

On 24 June 2025, the Employment Rights Bill 2024-2025 completed the Committee Stage, following 11 sittings of the House of Lords. Several amendments have been discussed and agreed during those sittings. While many of these were to tidy up the drafting of the Bill, or clarify its provisions, some are more significant.

So, what are the changes employers need to be aware of?

Trade unions

• Within five working days of being notified that the Central Arbitration Committee (CAC) has received a trade union's application for recognition, an employer will have to provide certain information about workers in the bargaining unit (name, date of birth and the category of worker to which they belong). Failure to do so may result in the CAC issuing a remedial order. Failure to comply with the order may result in the CAC issuing a declaration that the union is recognised as entitled to conduct collective bargaining on behalf of the workers constituting the bargaining unit.

• Employers and unions will now have 20 working days, or such longer period as the CAC may specify (with reasons) in a notice, to attempt to agree arrangements for the union to access workers in the proposed bargaining unit. Similar provision will apply where either party wishes to revisit recognition due to changes affecting the bargaining unit and where an application for derecognition is made.

Zero hours, low hours and agency worker provisions

• It will be automatically unfair to dismiss an employee for bringing an employment tribunal claim in which they allege their employer incorrectly issued a notice stating that their guaranteed hours offer had been withdrawn, or if they allege the existence of any circumstance which would constitute a ground for bringing such proceedings.

• Umbrella companies will be added to  the scope of the definition of a “work-finding agency”.

• Employees on zero hours, low hours or agency worker contracts can receive short notice payments in the same circumstances as they receive other wages on the insolvency of their employer (so they are treated as preferential debts, or preferred debts in Scotland).

• Employment tribunals will be able to impose financial penalties on all types of respondents in claims brought under the zero hours provisions where there are aggravating circumstances.

Annualised hours contracts

• Workers on annualised hours contracts will be included within the scope of the guaranteed hours provisions.

What happens now?

There are two more stages to the passage of the Bill through the House of Lords. The next of these, the Report Stage, is scheduled to take place on 14 July 2025. After that, there is a third reading before the Bill goes back to the House of Commons for the final stage and to receive Royal Assent.

Although many commentators expected the Bill to receive Royal Assent this month, the number of sittings required during the Committee Stage means that this is now less likely, especially because the House of Commons is due to begin its summer recess on 22 July, returning on 1 September 2025. It is therefore more likely that the Bill will complete its passage through Parliament this autumn.

An interesting development from the debates during the Committee Stage was a promise that an implementation road map, setting out the government's planned timetable for future consultations and the implementation of the Bill’s measures, would be made available and in fact has been published today - Implementing the Employment Rights Bill - Our roadmap for delivering change. This is a welcome resource for employers trying to prepare for the changes to come as the receipt of Royal Assent does not mean that all the provisions of the Bill automatically come into force. The Bill will require many further steps, including secondary legislation, in order to take effect fully. It is particularly interesting to see from the Implementation plan that the measures on fire and rehire and the changes to harassment laws are not expected until October 2026, and the day one right to unfair dismissal, along with changes to collective consultation triggers are now not expected until 2027.

There are therefore many steps still to come and the potential for further twists in the tale. Nevertheless, employers are receiving plenty of warning and should already be anticipating the enormous changes that the new law will entail in the labour market.