Political Reporter Sam Francis and Political correspondent Helen Catt report that the five largest business groups in the UK have jointly penned an open letter asking for immediate amendments to the government’s Employment Rights Bill. The new legislation, set to be reviewed by the House of Lords this month, introduces a right to secured hours and clamps down on zero-hour contracts that do not guarantee work. The British Chambers of Commerce, Confederation of British Industry, Institute of Directors, Federation of Small Businesses, and Make UK caution that the current iteration of the Bill could impede growth during an uncertain period for the UK economy. Despite the concerns raised, the government stands by its assertion that the Bill will bring about the “most substantial enhancement to workers’ rights in a generation.”
The proposed Employment Rights Bill would establish new entitlements for employees from the onset of their employment, including sick pay, shield from unfair dismissal, parental leave, and the ability to request flexible working arrangements. Additionally, the legislation will impose new constraints on “fire-and-rehire” procedures, whereby employees are terminated only to be rehired on less favorable terms. The business organizations – ordinarily at odds – express alignment with the government’s core objectives of bolstering productivity, wages, and workers’ rights. However, they caution that the Bill may inadvertently stifle growth and employment, running counter to the government’s aims. They suggest that the revisions could deter companies from hiring, particularly those on the edges of the labor market, as businesses may shy away from potential costly legal disputes.
Responding to the collective plea from business groups, a government representative reiterated that the Employment Rights Bill epitomizes a significant advancement in workers’ rights, underscoring the widespread support among businesses and the public for the proposed measures. The spokesperson emphasized that extensive consultations with businesses have shaped the legislative proposals, with ongoing engagement to ensure the legislation benefits both employers and workers alike. The Office for Budget Responsibility (OBR) recently disclosed its inability to factor in the Employment Rights Bill in its economic prognostications due to a lack of specific policy details. Despite this, the OBR anticipates that regulations impacting business flexibility and labor markets are likely to yield material and possibly overall detrimental economic repercussions on employment, prices, and productivity.
Conservative shadow business secretary Andrew Griffith echoed the business groups’ call for a reassessment of the Bill, labeling it a potent directive. Griffith concurred with the assessment that, in its current framework, the legislation could have destructive implications for the government’s focal growth objectives, emphasizing the imperative need to shelve the Bill promptly
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