Staffordshire Chambers of Commerce has written to local MPs raising concerns that the Government’s proposed Employment Rights Bill could damage hiring, deter investment and create unintended consequences for small and medium-sized businesses.
In a letter to Labour MPs Gareth Snell, Allison Gardner, David Williams, Adam Jogee and Leigh Ingham, deputy CEO Chris Plant warned that the scale of reform would bring additional costs, complexity and risk for employers, as well as resulting in fewer opportunities for people who are struggling to get into work.
He cited the Government’s own impact assessment, which puts the cost to businesses at up to £5 billion a year, and pointed to criticism from the Regulatory Policy Committee over a lack of evidence and proper rationale for intervention.
Among the Chambers’ main concerns is the replacement of the current two-year qualifying period for unfair dismissal with a nine-month statutory probation period.
The letter stated: “Businesses remain concerned about the lack of detail from Government as to what that procedure looks like in practice. Businesses are also concerned about the greater risk of employers being taken to an employment tribunal for what otherwise would be an acceptable reason for dismissal during an employee’s probationary period.”
The Chambers also raised concern over the removal of the waiting period for statutory sick pay, warning it could lead to a rise in short-term absences and lower productivity, and called for statutory sick pay from day two, which ‘would guard against this unintended consequence whilst still improving conditions for employees’.
Plans to allow zero hours contract workers to request guaranteed hours after just 12 weeks of work are also viewed as problematic, particularly for employers in seasonal sectors.
Chris wrote: “Employers tell us they will be disincentivised in hiring for periods lasting twelve weeks or longer, or will not hire, for fear of having to provide guaranteed work in quieter periods, when the demand for products or services is simply not there. We are therefore proposing a minimum reference period of 26 weeks.”
Proposed changes to trade union thresholds were described as ‘disruptive’, with the Chambers warning they ‘threaten to create more incidents of industrial action while not being truly representative of the workforce’.
The letter also welcomed recent amendments on ‘fire and rehire’ but said concerns remain about the ability of businesses to make reasonable contractual changes in response to shifting needs.
It also drew on a survey of more than 1,200 firms in the British Chambers of Commerce network. A third said changes to sick pay would alter recruitment plans, and a quarter said the same about the zero hours proposals. Eight in ten believed the Government had not consulted properly.
Chris warned: “If these changes to employment law go ahead as planned over the next few years, taken with the recent increases to Employer National Insurance Contributions and continued skills shortages, there could be a chilling effect on business appetite to hire and invest.”
He urged MPs to raise the issues with ministers and help shape a Bill that supports both employers and employees.
