techUK urges rethink on Employment Rights Bill to protect jobs and growth

As the Employment Rights Bill enters the Committee stage in the House of Lords, techUK highlights how more consultation with industry is needed.

techUK and its members support the government’s ambition to make work pay and to end unfair employment practices. However, some of the proposed changes in the Employment Rights Bill, especially when combined with strict penalties, risk unintentionally penalising employers despite their best intentions.

With no economic modelling underpinning these proposals, businesses are being asked to shoulder new burdens without a clear understanding of the impact. There is a growing risk that entrenched positions will lead to a worst-case outcome, one that stifles innovation and investment in jobs. This is counter to the government’s pro-growth mission.

We urgently call for further discussion and refinement to ensure the Bill supports businesses and protects workers.

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What does the Employment Rights Bill mean for the tech sector?

The UK government has announced the Employment Rights Bill, which includes many of techUK's manifesto recommendations.

techUK recommendations further considerations in the Bill:

Statutory Sick Pay: Many tech businesses take a proactive approach to health and wellbeing and do significantly more than is legally required of them. techUK has joined the CBI in recommending that government consider setting payment of Statutory Sick Pay in the range of 60-80% of earnings for those earning below Lower Earnings Limit or the £116.75 flat rate. This will strike the right balance between supporting employees and encouraging returns to work. Government should also retain a 1-day waiting period for SSP. The government could also consider setting it at a reduced rate for the first three days.

Collective redundancy and consultation: Large businesses often face difficulties with visibility across sites, making meaningful consultation challenging. For example, redundancies in one location may be managed separately from those at another, increasing the risk of inadvertent breaches of collective consultation obligations. While collective consultation is broadly considered a positive measure, there are concerns about the practicality of ensuring meaningful consultation for large employers with numerous establishments and employees. techUK believes that the cap on the protective award should remain at 90 days rather than being increased to 180 days. techUK strongly disagrees with the practice of fire and rehire. We are supportive of the code of practice that government launched in July 2024, as a balanced framework to address this issue.

Dismissal protections: For businesses to have the confidence to take a chance on new hires, it is vital they are protected from the heightened risk of tribunal claims. The current proposals would make employers more cautious about creating new roles, especially when taking the risk of growing their business, as dismissals from day one would be treated as redundancies and could trigger collective consultation requirements. Existing protections against unfair dismissal for protected characteristics from day one are essential and should remain, but extending these rights to any and all cases from day one risks opening the door to fraudulent claims.

Zero hour contracts: The Bill should consider replacing the ‘right to be offered’ a guaranteed hours contract with a ‘right to request’. techUK appreciates the reasons for greater protections for directly employed workers but applying it to temporary working through agencies is unnecessary given their separate framework of rights under the Conduct of Employment Agencies and Employment Business Regulations 2003 and the Agency Workers Regulations.

Flexible working: techUK has long advocated for the right to request flexible working from day one, where reasonable. However, it should be noted that some roles cannot be done at home, such as retail roles or on-site infrastructure roles. Companies should define flexible and hybrid working with regard to their specific organisational context. Employers, however, must not be expected to offer all forms of flexible working. techUK does not believe that employers should be required to suggest alternatives but rather that employers can and should consider alternatives, where possible. Introducing a requirement on employers to set out a single alternative flexible working arrangement would place burdens on employers and may compromise consistency and fairness to all other employees. Such burdens include those on the list of refusing request such as: extra costs, inability to reorganise work amongst staff, the business’ ability to meet customer demand and client requests will be negatively affected.

Right of trade unions to access workplaces: SMEs do not have sufficient resources to manage the extra burden of trade union involvement.

Employment rights enforcement priorities and governance: techUK called for the establishment of a Single Enforcement Body to help employers, employees and their representatives comply with the law, in our UK Tech Plan. The priorities for employment rights enforcement, as the government transitions to the Fair Work Agency (FWA), should focus on setting the foundations for a stable and orderly transition to a single enforcement body. The current enforcement bodies should be looking to provide stability and certainty by preparing for the upcoming FWA, as there is a danger of inconsistent application and enforcement persisting into the new enforcement body’s life. To demonstrate the commitment to social partnership, the FWA board should include trade associations and at least one SME.

Equality action plans: King’s College London has found that UK gender pay gap reporting 'has no teeth' and that current legislation is more focused on monitoring the problem but not actually fixing it. Collecting qualitative and quantitative diversity inclusion data on the workforce enables organisations to understand more specifically the issues and areas for improvement. techUK believes that what gets measured, gets done and that the mandatory equality action plans are good way of moving from measurement to action. techUK recommends that the government’s Office for Equality and Opportunity to create guidance on what makes a good equality action plan for companies and recommendations for how companies can support employees going through menopause.

Modern Slavery Act 2015: The proposed consequential amendments relating to the Modern Slavery Act 2015 only reflect the criminal justice elements while techUK believes this bill presents an excellent opportunity to reform the Act on the lines of the 2019 Independent Review and to go further towards the global norm of mandatory due diligence. The Act was world-leading, but is now a decade old, and with the world moving away from disclosures towards actionable supply chain due diligence, the UK risks being left behind. The Bill could be amended further to require firms to do due diligence in a way that aligns with emerging European law.

techUK also responded to the Employment Rights Bill Public Bill Committee in December 2024. If you are a techUK member, please get in touch to discuss this Bill.

Nimmi Patel

Head of Skills, Talent and Diversity, techUK

Antony Walker

Deputy CEO, techUK

Alice Campbell

Head of Public Affairs, techUK

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