CIPD urges clarity in the Employment Rights Bill

As new amendments to Employment Rights Bill were announced, the CIPD urged the government to clarify the situation for employers.

The professional body for HR & people development, which has been a leading advocate of the profession, has warned that the new legislation may result in reduced hiring or redundancies due to its extra costs.

The CIPD survey showed that nearly four out of five employers (79%) expect their costs to increase due to changes in unfair dismissal rules, statutory sick-pay reforms and workers’ rights to guaranteed hours on zero-hour contracts.

The most common ways that those who expect higher costs will manage them are by cutting their headcount (30%) through redundancies or recruiting fewer employees (23%), increasing automation (23%), decreasing training expenditure (22%), cutting their staff hours (17%), and increasing the proportion of temporary workers (17%).

The CIPD noted that the most important areas for employers are the new rules on unfair dismissal and the new rights of trade unions, but also pointed out that the government is yet to give much information about them.

According to the survey the most likely amendment to cause redundancies would be the removal of the qualifying period for unfair termination claims and the implementation a new statutory trial period.

The CIPD warned that if unions are given more recognition and access to workplaces, both employers and unions will need help developing an effective social partnership as well as employment relations skills.

The group urges the government to consult with employers about the details of the measures that will be determined by secondary legislation. It wants a swift implementation plan that offers clarity and support to small employers, who are the most susceptible to non-compliance.

Peter Cheese, CIPD’s chief executive, who attended the Government’s tripartite meetings about the bill, stated: “Our research shows employers are already beginning to seriously consider how the Employment Rights Bill might affect their workforce plans, and costs, even before the full details of the bill have been clarified and the bill has not yet been implemented.

It’s good that the government is committed to gradually implementing elements of the bill. This week, amendments have highlighted the complexity of changes employers face. It is essential that small businesses and other firms have enough time and understanding to prepare for these changes.

Cheese believes the success of this bill will depend on effective consultation, an implementation plan that is clear, adequate support, and appropriate enforcement.

He added that “without this, new laws, which the government hopes to improve working life, could have unintended consequences, such as undermining efforts to boost employment and labour market participation, and growth.”

The CIPD believes that the complexity and scale of the measures in the bill could add to the difficulties faced by many organizations following the recent increases in the employer National Insurance cost, business rates, and the living wage.

The CIPD emphasized the need for additional resources to ensure that the implementation of the CIPD is effective. This includes Acas, Central Arbitration Committee and the Employment Tribunal system.

The Employment Rights Bill has prompted employers to express their preference for support. 40% of respondents said they would like government guidance for implementation. 33% looked to professional bodies such as the CIPD, while 34% requested training materials for managers and HR.

In order to combat rising costs, 32% of employers intend to increase productivity and efficiency. 42% plan to raise prices. 26% are planning to reduce or stop business expansion. And 26% are slowing the growth rate of basic wages for employees who do not receive National Living Wage increases.

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