Consultations on the Employment Rights Bill are launched.

The Employment Rights Bill may cost businesses up to PS7,4bn in the next decade. This is according to the impact assessment published by the government and the four consultations launched on this landmark legislation.

According to documents released today, the government’s Economic Analysis states that the Employment Rights Bill has a positive impact on economic growth.

The government announced that ten million workers in the country will benefit from the new, comprehensive bill on workers’ rights. The government said that the bill would help those in the poorest areas of the country, saving them up 600 PS in lost income due to the hidden costs associated with insecure employment.

The Bill is designed to help employers, workers, and unions by boosting productivity, improving working conditions, and helping more people find secure employment while improving living standards.

Angela Rayner, Deputy Prime Minister of the United Kingdom, said: “Successful companies already know that strong rights for employees mean strong opportunities for growth. This landmark legislation will expand the employment protections provided by the best British firms to millions of workers.

“We promised to deliver the largest upgrade in rights at work for a generation, and the growth that our economy requires – and we are doing exactly that.”

Jonathan Reynolds, the Business Secretary, stated today in the House of Commons: “From its very first day, this government took steps to restore security to working people. This principle is woven throughout the legislation, ensuring employee rights are in line with a modernized economy, empower workers, and contribute towards our mission of economic growth.

“Make no mistakes – a worker-friendly economy is also a business-friendly economy. This legislation will bring a new deal to working people. It will help repair our broken labour markets. It will also tackle low wages, poor working conditions, and poor job security which have held our economy back.”

Red tape

Ben Smith, senior partner at GQ Littler law firm, focused his attention on the cost of PS7,4bn to businesses over the next decade, as detailed in the economic analyses. He said that the direct costs of these regulations are significant. In the short-term, it will be difficult for businesses to absorb the extra red tape.

Some businesses may struggle to cope with the immediate financial impacts. The changes to the statutory sick leave (which is estimated to cost PS400m per year) and the introduction of guaranteed hours (which will cost employers between PS100m and PS1bn annually in direct costs) will be a significant ongoing expense for employers.

According to him, smaller businesses and those with tight margins will find it difficult to adapt to the new rules and associated costs.

He added that the government was betting on increased productivity, a happier workforce and improvements to workers’ rights to have broader social and economic benefits. “While this may prove correct, these benefits will be long-term and difficult to quantify for businesses.”

Businesses have plenty of time to prepare for the changes that will be made in the Employment Rights Bill. Smith said that government plans could change dramatically during consultations. Businesses have the opportunity to voice concerns regarding costs.

Consultations on Employment Rights launched

The government is seeking opinions on four specific areas.

• Statutory sick pay:The Lower Earnings limit and the waiting period will be removed to make sure that SSP is accessible to all employees regardless of their income. This consultation is seeking views on the percentage rate that should be paid to those who earn below the current rate.
• Zero hours contracts for agency workers.The Government wants to stop “one-sided flexibilty” for all workers. This consultation is to better understand how to apply zero-hours contracts in the Employment Rights Bill to agency workers, without unintended consequences.
• Industrial Relations: The government is consulting about several changes to industrial relations framework. These include collaboration and accountability and giving trade unions the ability to represent their workers and deliver for them.
• Collective redundancy and fire and rehire: This consultation asks for views on the increase of the maximum period in which the protective award is given in cases where employers do not comply with the collective redundancy regulations, and the addition of interim relief for collective redundancies or unfair dismissals when there are fire and rehire scenarios.

Neil Carberry is the chief executive officer of the Recruitment and Employment Confederation. He said, “The consultations by the government on the Employment Rights Bill are a great opportunity for experts in the labour market and business to discuss the details of how these proposals will affect flexible work.

We are particularly pleased to have the chance to provide feedback on how zero-hours contract work interacts. The government has listened to our request.

“In delivering on the government’s Make Work Pay plan, we must ensure that the views of all workers are taken into account and that the current protections and benefits, such as those for agency workers, are not jeopardized or in conflict with future legislation changes.”

Today, the government also released 10 factsheets on the Employments Right Bill. These cover topics such as zero-hours contracts and the Fair Work Agency.

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