East Midlands Chamber has reinforced calls for parts of the Employment Rights Bill to be reconsidered after UK-wide research revealed significant concerns from businesses across a number of areas, such as the speed at which the Bill is travelling through Parliament and the impact of policies on tax, employment and regulation seen as a ‘barrier to growth’.
Nearly 8 out of 10 businesses that took part in the British Chambers of Commerce (BCC) study felt the impact of policies is not being adequately assessed, while a third said trade union proposals would have a negative impact.
Measures outlined in the Bill, currently going through the report stage in the House of Lords, include removing the lower earnings limit from statutory sick pay; requiring employers to take ‘reasonable steps’ to prevent sexual harassment of employees; ‘day one’ rights given to employees for parental or paternity leave and protection against unfair dismissal.
Findings from the British Chambers of Commerce research on business views on the Employment Rights Bill:
- One third (33%) said trade union proposals would have a negative impact
- Only 2% of firms believe the proposals would be positive
- Nearly 8 out of 10 (79%) of firms don’t feel the impact of new government policies is being properly assessed
- 77% don’t think policy change is moving at the right pace
- Nearly 7 out of 10 (69%) think government policies such as tax, employment and regulation are barriers to growth
East Midlands Chamber Director of Resources Lucy Robinson said: “Parts of this Bill, including requirements like statutory sick pay and day one paternity leave are due to kick in as soon as April next year – that doesn’t give much time for businesses to prepare – and then they’ll be followed not long after with a number of other measures, like the end of ‘fire and rehire’ and day one unfair dismissal protection, according to the timeline the government recently published.
“The proposed measures are going to impact the way most firms operate and are likely to add to their pile of paperwork and associated costs, as well as limit the scope of those looking to restructure. While I appreciate there’s been some consultation from the government, for 8 out of 10 businesses across the country that took part in the British Chambers of Commerce research to have said the impact has not been properly assessed underlines the need to get a better steer from the business community and how they’ll be affected.
“7 out of 10 UK businesses in this research said policies around things like tax, regulation and employment would be a barrier to growth – I’d say that’s a clear red flag and shows a need for more consultation to get this right. With the speed this Bill is moving through Parliament, also highlighted as a concern in this study, the government should be open to making changes before these policies are set in stone.
“When you consider the barrage of challenges firms have had to contend with recently, whether increased staffing costs from higher National Insurance contributions or inflation, it’s essential their needs are prioritised before this Bill is passed.
“For East Midlands businesses, I’d urge taking advantage of the Chamber’s HR Forums as a really useful resource around what the proposed changes might mean for them.”
British Chambers of Commerce Deputy Director of Public Policy Jane Gratton said: “The opportunity to make any significant changes to the Employment Rights Bill to ease the cost and disruption to business is fast disappearing over the horizon. While the government has consulted on several aspects, and listened to some concerns, the legislation still does not strike the right balance.
“A number of the proposals are deeply worrying for employers. They will increase employment costs, complexity and risk for firms, particularly SMEs who will be disproportionately affected. We are likely to see unintended consequences that could limit people’s employment opportunities and the UK’s economic growth.
“To grow our economy, firms must have the flexibility and agility to deal with challenges and opportunities. Government needs to help not hinder businesses – to innovate, adopt new technologies and be more productive and competitive. By adding more restrictions and building in further delays before change can happen, the Bill jeopardises all of this. It is creating a lose-lose scenario for everyone in the workplace.
“While there many are things in the legislation that reflect what good businesses are already doing, there are some specific proposals that need amending. Planned changes to dismissal rules, trade union ballot thresholds and zero hours contracts, for example, are some of the critical areas that need to be revisited.
“The government must continue its positive approach to engagement with business and remain open to changes. Only then can it ensure this legislation is proportionate, affordable and right for both firms and their employees.”
