Warnings issued about Employment Rights Bill potentially harming the job market
In a move aimed at enhancing workers' rights, the Labour government has proposed the Employment Rights Bill. However, the bill is facing strong opposition from a multitude of business groups across the UK.
The bill, which includes provisions such as 'day one rights' that allow Brits to sue employers for unfair dismissal for employment under six months, and new striking rights that could lead to "deteriorating industrial relations", is causing concern among business leaders. The Confederation of British Industry (CBI), the Institute of Directors (IoD), Make UK, and the British Chambers of Commerce (BCC) are among the groups that have signed a letter opposing the bill.
The letter, first reported by The Telegraph, warns of a potential crisis point in the labour market if the planned employee protections are not amended. Business groups fear that changes to the bill could have a "chilling impact" on hiring, and could hinder firms' capacity to offer flexible working.
The Office for Budget Responsibility (OBR) has also weighed in on the matter, suggesting that the Employment Rights Bill could have a "net negative" effect on the UK economy. OBR chiefs have warned Reeves that they will downgrade growth projections due to lower productivity forecasts.
The OBR did not take a full view on the impacts of the Employment Rights Bill on the UK economy earlier this year at the Spring Statement, but it did express concerns about the potential impact on employment.
The bill also eases requirements on the statutory recognition of a trade union and is set to scrap a minimum 50 per cent turnout requirement for strike ballots.
However, the Labour government has ordered its MPs to reject amendments to the Employment Rights Bill brought forward by Lords. This move has further fuelled the controversy surrounding the bill.
The opposition to the bill comes at a time when the UK jobs market is already struggling. This week, the Office for National Statistics (ONS) confirmed that 142,000 jobs had vanished over the last 12 months. Economists have widely pointed to the impact of higher employers' national insurance contributions (NICs) as the cause for the slump in the jobs market.
Despite the Federation of Small Businesses not signing the letter, it has agreed with the complaints made by other groups. Business associations have proposed to the new UK Secretary of State for Business to amend the Employment Rights Bill by easing the planned employee protections to avoid creating a potential crisis point in the labor market. Specific detailed proposals from the associations are not yet explicitly detailed.
As the debate around the Employment Rights Bill continues, it remains to be seen how the government will respond to the concerns raised by business groups and economists.
Read also:
- United States tariffs pose a threat to India, necessitating the recruitment of adept negotiators or strategists, similar to those who had influenced Trump's decisions.
- Weekly happenings in the German Federal Parliament (Bundestag)
- Southwest region's most popular posts, accompanied by an inquiry:
- Discussion between Putin and Trump in Alaska could potentially overshadow Ukraine's concerns
