Workers’ rights: £60bn industry warns against Labour overhaul
The government’s flagship workers’ rights legislation is poised to have “serious unintended consequences” for firms’ capacity to take on new staff and offer them sufficient hours if ministers fail to consult more closely with employers, more than 120 facilities management bosses have warned.
Writing in an open letter signed by the likes of FTSE 250 firm Mitie and industry heavyweight OCS, employers from the £60bn sector said the radical package would “discourage growth”, harming their businesses, clients and even staff.
“We are deeply concerned that some of the bill’s provisions will have serious unintended consequences that could harm both good employers and the very employees that the bill seeks to protect,” the firms wrote, telling the government they stood “ready to engage” with lawmakers.
A contentious piece of policy
Currently making its way through Parliament, the government’s Employment Rights Bill has been heralded by ministers “the biggest overhaul of workers rights in a generation”.
It contains sweeping changes to the legal relationship between staff and employers, including widely supported measures on the banning of “exploitative” zero-hours contracts and so-called fire and rehire practices.
But other changes in the bill, including bolstered employee rights from day one of employment and the changes to statutory sick pay, have sparked an impassioned backlash from UK plc, including a rare open letter co-signed by all five of Britain’s largest industry bodies.
The facilities management letter’s signatories, which also included Cleanology, warned those same changes that gave staff “day one” protection from unfair dismissal and a right to statutory sick pay would be especially damaging for their sector, which disproportionately comprises small firms.
Changing day-one dismissal rights would “encourage and increase the number of vexatious claims against employers” and would overburden an “already overstretched” tribunal system, they wrote.
They added that the changes around statutory sick pay would place a “new, immediate cost on employers” like them, in a sector which is reliant on tight margins and “stringent contracts”.
“At a time when inflation and operating costs are rising, this additional burden risks forcing employers to scale back hiring, reduce hours, or cut back on training and development opportunities for staff,” they added.
Labour’s overhaul of workers’ rights was one of the party’s flagship policies going into last year’s general election. It has been heralded by unions as overdue and much-needed. But opposition to it has been fierce, especially from smaller firms, which argue they will not have the wherewithal to ensure they conform to new bureaucracy or fight off tribunal cases.
The Bill is currently in the House of Lords. During a debate on its contents, Next chief executive Lord Wolfson warned it “could wreak havoc” on retailers, which rely on being able to employ temporary staff around busy moments in the calendar, something the bill will make more difficult.
A government spokesman said: “We don’t believe it is fair for workers to be dismissed without any good reason or denied sick pay from the first day they are ill.
“That’s why through our transformative Plan for Change, this Government is delivering the biggest upgrade to workers’ rights in a generation, and our measures already have strong support amongst business and the public.