Business Concerned By Employment Rights Bill

The British Chambers of Commerce has used an evidence session on the Employment Rights Bill to highlight businesses’ serious concerns about the legislation and the speed and detail of consultation.

The issues included:

A lack of detailed consultation on wide ranging changes to Trade Union powers. Businesses are keen for further consultation on the new laws which will make the recognition process easier for unions, lower the voting threshold for taking industrial action, and halve the notice period for unions to inform employers they are about to take action.

Greater restrictions and penalties for firms who need to make workforce changes. Businesses feel proposals on zero hours contracts are mainly sensible, allowing workers to enjoy this flexibility when it suits them. But the requirement to offer guaranteed hours after only 12 weeks, could be disastrous for firms who need to respond to seasonal and fluctuating demand - especially those in hospitality and agriculture.

More responsibilities, costs and complexity for employers. There are concerns that increased restrictions for firms who need to make changes to the workforce – together with the ramping up of financial penalties for those who make mistakes in the process – could be crippling for SMEs.

The BCC gave its evidence this morning at a hearing of the Employment Rights Bill Committee on the proposed changes.

The Bill includes some of the most significant and wide-ranging changes to employment laws for decades. Employers are concerned that major decisions have been taken and written into the Bill without detailed consultation with business.

The Government’s own assessment suggests that the legislation will cost businesses almost £5bn per year, with SMEs impacted the most.

These costs follow a harsh budget for business, where increases in employers’ national insurance contributions and the national living wage are set to pile a further cost of over £20bn on firms.

Businesses welcome the overall aim of this Bill to guarantee job security, offer employees a fair reward and provide them with workplaces free from discrimination.

But the scale and scope of the changes is huge, with many feeling they are being rushed through at breakneck speed.

The Budget has already left many firms feeling bruised, and if this legislation is enacted as it stands, it could hamper growth, restrict recruitment and lead to job losses.

Firms are particularly concerned about the lack of detailed consultation on the Trade Union changes, especially when the Government’s own assessment was so vague about the impact.

Overall, there is a lot in the Employment Rights Bill that reinforces much of what good businesses already do. But the fear remains that certain elements could create huge costs for firms and damage the UK’s ambitions for growth.