New research from the Federation of Small Business suggests that Labour’s employment plan will harm jobs, lock people out of work and result in a spiralling benefits bill.
The research shows that 92% of employers they represent have concerns about measures in the Employment Rights Bill such as changes to unfair dismissal legislation which would expand the grounds for employees to take their new employer to a tribunal from their first day in the job.
The FSB says that the Prime Minister must now show he “gets” the importance of creating and sustaining jobs by scrapping this part of the Bill, returning instead to the one-year qualifying period in place under the last Labour Government.
Employers said that the Bill would result in them recruiting fewer staff, cancelling or scaling down plans for investing and expanding and even reducing headcount before the measures kick in.
People out of work or with a poor job history are set to be especially hard-hit, with several bosses saying they will change their recruitment or employment practices and, in some cases, avoid hiring those with a poor work history or those who haven’t had a job before.
Tina McKenzie, FSB’s Policy Chair, said: “Small firms have made it crystal clear that the Bill will not motivate them to hire more whatsoever. Their feedback is emphatic, resounding, and overwhelming.
While flexible working can be beneficial for some, the lack of predictability leaves too many at the mercy of unstable schedules and income
“Ministers must show they get the risk to jobs and avoid a cavalier, dogmatic or patronising approach to the loud and clear feedback from small businesses. The economy is in no fit state for a ‘war on work’.
“If employers fear they will be sued, fewer will hire – with knock-on effects including a rising benefits bill and a lasting drag on living standards across the UK.
“These changes would have a severe negative impact on the real economy. All those who will be locked out of work as a result of this Bill deserve better from the Government.
“Removing new rules on day one dismissal processes from the Bill altogether, and returning to the one-year qualification period in place under the last Labour Government, is a more balanced approach and a cost-free route for the PM to show he gets it on the importance of creating and sustaining jobs.”
This follows a survey by the London Chamber of Commerce and Industry that found that 76%) of businesses with fewer than 50 employees felt that the Government has not engaged enough with the business community on the Employment Rights Bill.
And mixed reactions from lawyers on the wider effects of sick pay, zero-hours contracts, flexible working and sick pay.
Jasmin Dhillon, Employment Partner at Spencer West LLP said zero-hours contracts have long been a point of contention adding that the Bill “takes aim at exploitative practices by providing workers on these contracts with more certainty over their hours and income.” adding: “While flexible working can be beneficial for some, the lack of predictability leaves too many at the mercy of unstable schedules and income. The new rules should offer greater security, giving workers the ability to plan their lives without fear of last-minute shifts or cancelled hours.”
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