It’s been a very busy week as the Employment Rights Bill returns to Parliament with the Government’s amendments published.
The Employment Rights Bill is currently progressing through the necessary legislative stages and is expected to receive Royal Assent by 22nd July. However, while this marks a significant milestone in its journey to applying in the workplace the actual implementation of its provisions is anticipated to take longer. The Bill is likely to come into force in the latter part of 2026 or possibly even later, depending on the timelines for consulting on and drafting regulations, setting up enforcement mechanisms, and ensuring employers and workers have adequate time to prepare for the changes.
The Employment Rights Bill 2024-25 was introduced in the House of Commons on 10 October 2024 and had its Second Reading on 21 October 2024. A Public Bill Committee (PBC) reviewed the Bill between 26 November and 16 January 2025, where amendments were made after line-by-line scrutiny.
The Government amendments were introduced on 5th March and will be debated in the Commons next week on 11th and 12th March. Subsequent Parliamentary procedure on the Bill is explained here.
This week, the Business Minister Jonathan Reynolds MP gave a statement on the Employment Rights Bill, and the Government has published responses to recent consultations, including those on contractors and the zero-hour provisions. It has confirmed that agency workers will be included in the guaranteed hours provisions. APSCo members can read our update on these amendments here.
As we set out in our recent press release, APSCo is advocating that this is the wrong decision for the professional sector. It is not needed and is being implemented to avoid a loophole, delivering negative unintended consequences on the labour market and UK growth. Tania Bowers, Global Public Policy Officer at APSCo, said:
“The announcement is both concerning and highly disappointing given the Government’s recognition that skill short remits such as education, health and social care are in dire need of more qualified and temporary resources.
This news means that highly skilled and highly paid agency workers that are often required at the last minute will be more difficult to place in temporary positions. Schools, for example, cannot guarantee the hours that a supply teacher will be needed, which puts them in a difficult situation where they risk simply not having access to the people they need at the last minute. The same can be said in health and social care. This will have a detrimental impact on the public who rely on these resources.”
Tania also highlights the need for contractors which are critical to the Government’s growth plans in the Industrial Strategy across technology, engineering, life sciences and net zero targets. It could be argued that the extension of the zero-hours legislation across the whole temporary workforce is over regulation and could be a ploy to close off loopholes that could be exploited rather than the genuine risk of exploitation in the sector. You can read more on Tania’s response here.
Ahead of the Commons debate on 11th and 12th March, APSCo is circulating briefings to Parliamentarians, highlighting concerns about the Bill's balance between worker rights and labour market flexibility. Read more on the Report Stage Briefing here.
We make it clear that as a sector we are concerned that the Bill does not get the balance right and we invite Parliamentarians to raise our concerns in the debate or in Parliamentary questions. We have also uploaded a precedent letter that we urge you to use to write to your MPs. You can write to the MP representing the area in which you live and/or where your business is located. Find your MP here and access further guidance here.
Take a look at our Employment Rights Bill Hub, part of our Legal Services, for the latest updates and expert end-client guidance. Explore the hub here.
Under a proposed amendment to the Employment Agencies Act 1973 included in the Employment Rights Bill, umbrella companies will now fall under the scope of the Conduct Regulations and will be regulated by both the Employment Agency Standards (EAS) Inspectorate and the newly established Fair Work Agency. This change aims to ensure better protection for workers under umbrella arrangements and they will have access to the same employment rights and protections as those engaged by recruitment businesses.
However, while these regulatory changes are significant, we would like to stress that they are unlikely to take effect until late 2026 at the earliest, as further legislative processes and implementation frameworks need to be established.
However, HM Treasury’s (HMT) reforms regarding PAYE responsibility for umbrella workers will come into effect earlier. In April 2026, responsibility and liability for PAYE obligations on umbrella workers’ pay will shift to the party with the contract with the client utilising the worker’s services. Look out for meetings and consultation on this over the next few months.
We would highly recommend that you become proactive and talk to your clients, be a thought leader and use the expertise that APSCo can supply, including our end client guidance and Employment Rights Bill resource hub.
Last week, APSCo United Kingdom held a Legal Forum focused on how organisations can get prepared for the upcoming Employment Rights Bill. Our panel featured specialists in law, HR, and tax, ensuring comprehensive insights from every angle: Nicola Ihnatowicz, Employment Law Partner, Trowers & Hamlins, Thomas Wallace TEP ATT, Director, WTT and Danny Owen, Commercial Development Manager and NatWest Mentor. If you missed it, sign up to our next Legal Forum in June.
As well as zero-hour contract legislation, other areas we’re watching closely are:
We would urge members to get involved with APSCo policy as there’s a lot that is yet to be determined, including the critical definitions within the Employment Rights Bill zero-hour provisions and the mechanism for the new umbrella tax obligations.