The Employment Rights Bill has entered its final parliamentary tussle after the House of Lords rejected several key government proposals, sending the legislation back to the House of Commons for further debate.

The Bill had reached one of its last stages — the consideration of amendments — but must now undergo a process known as “ping pong”, where both Houses exchange and refine amendments until agreement is reached. Only once both Houses agree can the Bill receive Royal Assent and become law.

Key Lords Amendments

Peers proposed changes on:

• Zero-hours contracts and guaranteed hours
• Day-one unfair dismissal rights
• Industrial action ballot thresholds
• Trade union political levies

Zero-hours contracts

The Lords voted 302 to 159 against a proposal requiring employers to offer guaranteed hours from day one.
Instead, Lord Fox (Liberal Democrat) suggested employers should write to workers at the end of each reference period, offering the option to accept or decline guaranteed hours.

“We share the minister’s aim to make sure that every employee has the right to move from zero hours to guaranteed hours,” Lord Fox said. “But for smaller employers, it is an added burden that does not need to be there if the employee does not wish to leave zero hours.”

Day-one unfair dismissal rights

The proposal for day-one protection against unfair dismissal was defeated 301 to 153. The Resolution Foundation’s Day One Frights report — which warned that such a move could deter hiring — was repeatedly cited in debate.

Conservative peer Lord Sharpe of Epsom argued the measure would discourage employers from “taking a risk” on young workers, while Lord Vaux of Harrowden called it “the most damaging element in the Bill.”

Former TUC leader Baroness O’Grady countered that employers could still dismiss “fairly” under existing provisions, and that without day-one rights, “workers will continue to bear the risk that they can be sacked at whim.”

Industrial action and political levies

Peers voted 267 to 153 to retain the 50% turnout threshold for industrial action ballots, and 249 to 142 to reject automatic enrolment of trade union members into political levies.

What Happens Next?

The Bill will now move back to the Commons, beginning a back-and-forth “ping pong” process until both Houses agree on the final wording. There is no fixed time limit, but the Bill could lapse if the process drags into the next parliamentary session.

Reactions from Business and HR Experts

Kate Palmer, Chief Operations Officer at Peninsula Business Services, noted:  “If the Bill ends up moving forward with a six-month qualifying service, then employers will retain some of the freedoms they enjoy under the current two-year period. However, as day-one rights were a manifesto commitment, the government is unlikely to back down easily.”

Sarah Kerr, HR Technical Consultant at AdviserPlus, added:  “The Lords’ revised amendment on guaranteed hours adds flexibility for workers, but for HR teams this will mean more complex admin — tracking opt-ins and opt-outs and ensuring the right offers are made at the right times.”

She cautioned that HR teams should hold off on major policy changes until the Bill’s final form is agreed but remain alert: “The eventual outcome will likely bring notable shifts in dismissal rights and contract flexibility that will require swift operational updates.”

Outlook

The Employment Rights Bill remains on track to become law, but final details — especially on dismissal rights and contractual flexibility — hang in the balance.
Employers and HR professionals should monitor developments closely, as the outcome of this parliamentary “ping pong” will shape workplace policy for years to come.