The Employment Rights Bill is approaching its final stages, with significant amendments proposed by peers this week. These changes, including NDA restrictions, fire and rehire reforms, and expanded bereavement leave, could have far-reaching implications for both employers and employees.

The Employment Rights Bill (ERB) is nearing the final stages of the parliamentary process. However, last week, peers have proposed 63 pages of amendments with a number of these coming from Baroness Jones of Whitchurch and other Labour peers (many with cross party support) and therefore are likely to find their way into the final Act.

The amendments are important, both in their number but also the likely effect they will have on both employers and employees alike. These include banning non-disclosure agreements which cover harassment and discrimination at work, reforms to fire and rehire and extension of bereavement leave entitlement.

Non-disclosure agreements (NDA)

An NDA or confidentiality clause is a legal agreement in which one or more parties agree to keep certain information confidential. There has been growing criticism over the years, especially following the #MeToo movement.

Whilst no provision for introducing a ban on NDAs was included in the original draft, the Government has now included a new clause 22A of the ERB which introduces a significant change to the enforceability of confidentiality clauses in employment agreements. It renders void any provision in a contract between an employer and a worker that attempts to prevent the worker from making allegations or disclosures about harassment or discrimination.

There are key features of the amendment:

• Scope: The restriction relates to allegations about direct discrimination, indirect discrimination and discrimination arising from disability (as defined in the Equality Act 2010). However, currently, it does not cover a failure to make reasonable adjustments or victimisation, although future regulations may alter this.
• Employer response: It applies to disclosures about how the employer responded to such allegations or disclosures.
• Agreements affected: Confidentiality clauses in all types of agreement are affected, including contracts of employment and settlement agreements. Some agreements may be ‘excepted’ but details have not yet been released and this is due to be defined in secondary legislation.

The change applies to both current and former workers and can be extended by Regulations to include individuals, such as contractors, trainees and those on work experience. Further, the protection applies whether the alleged discrimination is by the employer or by another worker, and whether the victim is a complainant or another worker. The change is framed as ending systemic misuse of NDAs and fostering transparent, safe workplaces.

This amendment has been welcomed by unions and campaign groups such as Can’t Buy My Silence UK (run by Zelda Perkins, the former assistant to Harvey Weinstein). Whilst other commentators are concerned that employers may be less willing to settle discrimination and harassment claims if they can’t insist on confidentiality thereby forcing those who have been discriminated against or harassed to undergo the stress and expense of lengthy Employment Tribunal litigation to achieve redress.

It may be the intention that a valid settlement agreement (where the individual must take independent legal advice for the agreement to be binding in relation to certain statutory claims) will constitute an ‘excepted agreement’. Given that solicitors are already subject to a warning notice from their regulator, the SRA, that puts significant limitations on their ability to draft clauses that seek to silence complainants, this may provide the necessary balance to mitigate unintended consequences.

For employers, this is a step-change. Confidentiality wording in contracts, template settlement agreements and policies will need a rapid audit. Any clause attempting to silence disclosures about equality breaches will be unenforceable and financially risky. Staff cannot be threatened with breach of contract for speaking to regulators, police, media or colleagues. Using standard NDAs therefore carries serious litigation and victimisation exposure. Even where the clause falls away, coercive tactics could ground further claims.

“Fire and Rehire” restrictions

One of the most significant proposals in the ERB was to bring an end to the practice of fire and rehire (and fire and replace). However, there were concerns that these proposals could severely restrict employers from making even reasonable contractual changes. In response, the Government revised (and in places softened) its approach, although the changes represent a significant shift from current employment practice. The Government’s revised approach appears to focus on the strictest safeguards on contractual changes that could be most susceptible to misuse which typically impact vulnerable workers the most.

The original proposals that sought to prevent employers from forcing through changes to contracts by way of ‘fire and rehire’ were onerous and complicated. An employer seeking to make any change to an employee’s contract would be liable for automatic unfair dismissal if it fired the individual and rehired them (or hired another person to fill their role) unless they could show that they needed to make the change to avert the imminent financial failure of the business.

Now, the employee is protected if the proposed change is a ‘restricted variation’. The list of restricted variations are wide-ranging and includes changes to pay, piece work, pensions, hours, shifts, time off, or any other variation that may be set out in secondary legislation. Interestingly, changes to duties are not covered, but the employer cannot reduce the pay that the employee receives as a result of that change. Similarly, a requirement for an employee to relocate is also not covered, but the other terms and conditions in the new location would need to mirror the existing role or fall foul of the protection.

If an employer then dismisses because an employee refuses to accept a non-restricted variation (i.e., one not set out above), the ERB sets out certain factors which the Employment Tribunal must consider when determining if the dismissal is fair. These include the employer’s reason for the variation, whether meaningful consultation took place and whether any incentives were offered to the employee in return for agreeing the variation. In practice, this puts routine contractual tweaks back into the conventional unfair dismissal arena (and the unfair dismissal test on reasonableness), but on stricter procedural terms. Employers should therefore take care to evaluate all relevant factors before proceeding with dismissals linked to non-restricted variations.

Bereavement leave

The ERB introduces a general entitlement to bereavement leave, expanding it beyond existing protections which are limited to parents. The new amendments go further by granting the right to bereavement leave to employees who suffer pregnancy loss before 24 weeks – including losses resulting from miscarriage, ectopic pregnancy and unsuccessful embryo transfer during IVF treatment.

Whistleblowing

Although unlikely to pass, proposed amendments to the whistleblowing regime are important to keep on your radar as they may gain traction over the coming years. The amendments proposed are as follows:

• The list of things that might amount to a qualifying disclosure is (a) simplified in language; and (b) expanded to cover mismanagement of public funds, abuse of authority, or anything else set out in Regulations.
• To be protected, the disclosure must actually be in the public interest (currently, it is enough that the worker reasonably believes it to be in the public interest).
• A new ‘Office of the Whistleblower’ will be created within one year of the ERB gaining Royal Assent. It will become the primary channel for disclosures and support (disclosure to employers and other reasonable recipients remain protected). The Office of the Whistleblower will set minimum standards for whistleblowing policies, provide an independent reporting line, and can issue enforcement and redress orders.
• It becomes an ‘offence’ to intentionally or recklessly subject any whistleblower to a detriment, with claims of detriment to be brought to an employment tribunal, and with those claims carrying substantial fines (up to 10% of global turnover). This ‘offence’ appears to be criminal in nature, but an employment tribunal is an unusual place to hear a criminal case.
• Certain employers (50+ staff, £10 m+ turnover, financial-services firms or those at AML risk) will have to take reasonable steps to investigate any protected disclosure. Regulations (to be made within six months of the Act passing) will define those steps.

These amendments will return to the House of Lords on 14 July for further debate before returning to the House of Commons for a final vote. The final vote will now take place after summer recess, and it is clear that a lot of work still needs to be done by various government departments in order to prepare the statutory instruments that will be required to give effect to much of the substance of the legislation in the proposed timeframe.

Once passed, the Government has confirmed that implementation will follow a phased approach, with the majority of changes expected to take effect from April 2026 and into 2027.

This is intended as a summary of the amendments to the ERB. Legal advice should always be sought that is tailored to your specific circumstances.