Most employers believe that the enactment of a workers' rights legislation could impede economic growth, as suggested by a survey.
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Damning Poll Reveals Businesses' Concerns about Workers' Rights Overhaul
A staggering 72% of British business leaders believe that the government's proposed workers' rights overhaul could hinder economic growth, leading to less hiring and more outsourcing, according to an IoD survey.
The latest data adds to a growing line of evidence suggesting that businesses fear the package may impose onerous bureaucracy and leave them vulnerable to costly tribunal claims. Moreover, several industry bodies have sounded the alarm, claiming the reform could severely harm living standards, as stated in an open letter back in April.
The overhaul, spearheaded by Deputy Prime Minister Angela Rayner, boasts popular measures like banning exploitative zero-hours contracts and the notorious 'fire and rehire' practices. Yet, it's the less-celebrated changes to statutory sick pay (SSP) and the new 'rights from day one' entitlements that have triggered stark warnings from employers.
The survey found that almost half of these employers would be less inclined to hire new staff due to the workers' rights bill, while over a third planned to outsource roles or operations to other countries. Roughly a quarter admitted they intended to make redundancies.
Alex Hall-Chen, the IoD's principal policy advisor for employment, argued that the workers' rights bill, combined with the recent increase in employer National Insurance Contributions, is significantly damaging the hiring intentions and confidence in the UK economy.
The study also found a silver lining: about half of the directors surveyed planned to invest more in automation to cut out staff and boost productivity.
Meanwhile, Andrew Griffith, the shadow business secretary, weighed in, saying Labour's Employment Rights Bill is having a devastating impact, with seven out of ten businesses confirming it will block growth. He added that the bill could result in workers losing their jobs to robots and foreign workers.
However, a government spokesperson defended the reforms, stating that consultations with businesses would ensure that new laws work for them while putting money back into the pockets of working individuals.
Growing Apprehension among Businesses
- Hiring Woes: Concerns about the potential impacts on hiring are widespread, with sectors like facilities management expressing concerns that the bill could discourage businesses from taking on new staff and potentially lead to economic slowdown.
- Outsourcing Threat: Fears of outsourcing work overseas also remain high, especially as businesses seek to reduce costs in the face of these reforms.
- Redundancies on the Rise: The overhaul has led many employers to question whether they will need fewer workers, leading to speculation about an increase in redundancies.
- The Evolution of Work: As businesses grapple with these changes, there may be a shift towards more automation and technology adoption to cope with the new requirements and maintain productivity levels.
However, the full extent of the reform's impact on statutory sick pay and 'rights from day one' has yet to be detailed. Nonetheless, the businesses' apprehension around the overall changes paints a complex picture of a shifting landscape in employment practices.
- The apprehension among businesses extends to the finance sector, with many expressing concerns about the potential increase in costs associated with new employment laws, particularly the reforms to statutory sick pay and 'rights from day one.'
- The growing unease in the business world about the workers' rights overhaul has raised questions in the political sphere, with some voicing concerns about the potential impact on employment figures and the broader economy.
- In light of the proposed reforms, the insurance industry is also closely watching developments, particularly in relation to businesses' increased exposure to tribunal claims and the potential for increased premiums due to the increased risks.
