Employment Rights Bill - Latest News

The Commons passed its amendments yesterday (8^th December 2025) and the Bill returns to the Lords for debate on the 10^th December.  It would be constitutionally unusual for the Lords to keep holding up a “manifesto” government bill, but both the Conservative and Liberal Democrat Lords feel very strongly that some aspects of the Bill will harm business and will negatively impact job creation, exactly the opposite of what the government hopes to achieve.

In summary the Commons position as of 8^th December (with our commentary) is:

• Employees will gain protection from unfair dismissal once they reach six month’s service.  This will apply from 1^st January 2027 and will include any employees with continuous service of less than two years on 1^st January 2027.  This was negotiated and the Lords are unlikely to reject this amendment.
• The damages cap for unfair dismissal claims will be removed. This is more contentious – there is dispute as to whether it was negotiated with business, and there has been no impact assessment or consultation on the measure. The Liberal Democrats are calling to the government to commit to set a new, higher cap through secondary legislation following consultation. It is unclear what position the Lords will take.
• Guaranteed hours – the Commons have not accepted the Lords’ amendment for a “right to request”.  They have tabled amendments that will create a statutory duty to consult on the length of the initial reference period and the length and timings of subsequent reference periods before exercising the relevant powers (removing the 12-week period from primary legislation).  This is an improved position.  Our sector is calling for reference periods of between 6-12 months in respect of temporary workers. It is unclear how strongly the Lords will continue to push right to request.
• In relation to seasonal work, to help address fluctuating demand, the Bill allows guaranteed hours offers to take the form of limited-term contracts where reasonable. The Government have tabled amendments that place a statutory duty on the Government to consult before making any regulations to specify what counts as a temporary need. This is a positive step and may be acceptable to the Lords
• The opposition parties have sensible concerns about repealing the 50% threshold for ballots on strike action (of those workers entitled to vote). The government considers that introducing non-postal balloting will very significantly raise participation levels but in recognition of concerns have tabled an amendment, which will place a statutory duty on the Secretary of State to lay a statement before Parliament that demonstrates how the Government have had regard to non-postal balloting before making regulations to repeal the 50% threshold.  This is quite a critical issue, so it will be interesting to see if they are willing to accept the government’s concession.

Take a look here for the latest resources and Employment Rights Bill guidance.