Bosses fear workers’ rights overhaul more than National Insurance hike
Employers are more worried about the government’s upcoming reforms to workers’ rights than the widely condemned National Insurance rises announced in the October Budget, a fresh poll has revealed.
More than a third (34 per cent) of bosses cited the far-reaching overhaul to employment rights as the biggest challenge facing their organisation in 2025 despite the hike to employer national contributions (NICs) coming into force next month.
By contrast, 19 per cent highlighted the NICs changes – which comprise raising the headline rate from 13.8 to 15 per cent and slashing the threshold at which it applies from £9,100 to £5,000 – as their top concern in the poll conducted by Hanbury Strategy.
The findings will pile fresh scrutiny on the slew of changes to employment rights that are set to return to the House of Commons next week to be voted on by MPs.
Business groups and bosses have previously warned of the chilling effect that some of the more contentious reforms will have on firms’ ability to hire and retain staff, including changes to employees’ ‘rights from day one’ and entitlement to sick pay.
A Federation of Small Businesses survey from January found 92 per cent of its members had concerns about the Bill. And three quarters highlighted fears relating to the current changes to unfair dismissal, which allow staff to bring an Employment Tribunal claim from day one of employment.
Other measures with a broader base of support include outlawing so-called ‘fire and rehire’ employment practices and ‘exploitative’ zero hours contracts.
Emilie Oldknow, chief executive at Hanbury Strategy, said: “Employers are concerned about the impact of these forthcoming workers’ rights changes.”
“With the legislation set to pass later this year, employers’ window to plan is narrowing,” she added.
The Hanbury study comes just days after reports over the weekend suggested that ministers were planning to axe workers’ ‘right to switch off’ from the Bill when it returns to MPs; once see as one of the revamp’s central changes.
According to The Sunday Times, ministers will confirm the policy has been dropped when they table a series of amendments to the bill on Tuesday, in a bid to ease the sweeping overhaul’s effect on businesses.
Commenting on the expected amendment to the right to switch off, Andrew Griffith, shadow business secretary, said: “If they were remotely serious about growth, Labour would be dropping the whole of their job-killing Employment Bill, not just be blunting the edges of the scythe that they are still taking to British jobs.”