The Workers’ Rights Initiative Is Causing Alarm Among UK Businesses

Rayner’s workers’ rights plan is sparking panic in corporate Britain

As they brace for a £25bn tax raid, businesses must also contend with a litany of new red tape

LUCY BURTON

Fed-up pub owners will this week gather on the House of Commons terrace overlooking the River Thames to grill MPs. Fuelled by soft drinks, cups of tea and their own rising rage, they will interrogate politicians about a tax raid that has infuriated the sector – and the Government’s landmark workers’ rights bill, which is making things worse.

“We will be putting our message across,” says Philip Thorley, who operates 18 pubs across Kent and will be attending the meeting organised by lobby group UKHospitality. “Our business has been going for 50 years and we intend for it to be going for another 50, but it would appear [that the Government] have no care whatsoever for hospitality or retail or anyone that employs young people.”

The publican, whose family business Thorley Taverns has around 400 staff, says tax rises mean his staff costs will go up by £400,000 a year. To make matters worse, the Employment Rights Bill will add heaps of red tape that he fears will make hiring a nightmare.

“First-day employment rights will just mean we’re hiring less people,” he says. “What incentive is there to hire more people and young people? As an employer, I appreciate that whenever I interview someone they’re [also] interviewing me. Then in the first few weeks we decide if we like them and if they like the job. It’s one-sided now.”

It is a sentiment shared by business leaders across the country and those running companies of all sizes. Lord Wolfson, the chief executive of FTSE 100 retail giant Next, last week expressed concerns about plans to ban “exploitative” zero hour contracts.

“We offer staff extra hours in the run-up to Christmas. If the legislation is going to mean that those hours have to be contractually binding forever then we just won’t be able to do it at all, it would be impossible,” he told the BBC.

Surprise scope of changes

Business owners knew that an employee rights shake-up was coming under Labour, but the scope of the changes were still a surprise.

The workers’ rights revolution spearheaded by Angela Rayner includes a greater entitlement to flexible work, a crackdown on zero-hour contracts, broader eligibility for sick pay and extra union powers. While businesses back some of the changes, there is widespread fear of accidentally running afoul of many of the rules.

For example, companies face thousands of pounds in penalties if they fail to tell staff in writing that they have a right to join a union. A proposal aimed at protecting workers from being harassed by “third parties”, such as clients or customers, while at work has also led to fears that pub landlords could be sued if someone takes offence to “overheard conversations” among customers.

“We are very good at controlling our customers but I can’t control what they say,” says Brian Whiting, the chief executive of WH Pubs.

The biggest worry is that an extra 9m staff will have the right to take companies to court for grievances such as unfair dismissal under the new regime. Currently, people must be employed for at least two years before they qualify for this power. Rupert Soames, the head of the Confederation of British Industry (CBI), last week argued that the new legislation would create “an adventure playground for employment rights lawyers”.

James Davies, a lawyer at Lewis Silkin, expects a spike in work advising on the changes, followed by a potential rise in unfair dismissal claims when the rights kick in next year.

“One of the major issues in the UK for employers is not the actual employee rights but the cost and time incurred on defending claims,” he says.

One person who has been closely involved in Whitehall talks says: “Businesses are angry because they don’t want to get sued and they’re mystified the Government seems blasé about employment consequences – it comes across as incompetent.”

Economic impact

The enormous cost of the Budget to businesses has given greater urgency to efforts to soften the Employment Rights Bill. The Government’s own estimates suggest that the employment rights changes could cost companies as much as £5bn a year, on top of the £25bn in extra employer National Insurance contribution from April.

“The debate around the nature of the Employment Rights Bill has changed because of the context of the Budget,” says Kate Nicholls, the UKHospitality chief executive.

Although the biggest changes are subject to consultation – areas such as day-one workers’ rights are likely to only really kick in after a new statutory probation period of around nine months, for example – bosses are already thinking twice about who and how many they hire in anticipation of the new rules.

The Federation of Small Businesses (FSB) has warned that two-thirds of its members are planning to cut back on hiring because of the looming red tape.

“We are more cautious,” says Annabel Lui, the co-founder of baker Cutter & Squidge. “We will be interviewing more people for each position”.

Despite outcry from businesses, the Government has so far been determined not to soften its proposals. Darren Jones, chief secretary to the Treasury, last week insisted that there would be no rethink on the workers’ rights overhaul. Sir Keir Starmer also doubled down on the controversial plans during Prime Minster’s Questions, stressing their importance.

However, the impact of these changes on the economy may force a rethink. Sir Keir and Rachel Reeves are under immense pressure to prove they can deliver economic growth after rising borrowing costs and weak recent GDP put the Chancellor at risk of breaching her fiscal rules.

“I think the Government always makes employment policy based on what the labour market looks like in any given week, so if it continues as it is it’ll get watered down,” says the person involved in Whitehall talks.

The Telegraph: continue reading

Featured image: Getty Images, Reuters

••••

The Liberty Beacon Project is now expanding at a near exponential rate, and for this we are grateful and excited! But we must also be practical. For 7 years we have not asked for any donations, and have built this project with our own funds as we grew. We are now experiencing ever increasing growing pains due to the large number of websites and projects we represent. So we have just installed donation buttons on our websites and ask that you consider this when you visit them. Nothing is too small. We thank you for all your support and your considerations … (TLB)

••••

Comment Policy: As a privately owned web site, we reserve the right to remove comments that contain spam, advertising, vulgarity, threats of violence, racism, or personal/abusive attacks on other users. This also applies to trolling, the use of more than one alias, or just intentional mischief. Enforcement of this policy is at the discretion of this websites administrators. Repeat offenders may be blocked or permanently banned without prior warning.

••••

Disclaimer: TLB websites contain copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available to our readers under the provisions of “fair use” in an effort to advance a better understanding of political, health, economic and social issues. The material on this site is distributed without profit to those who have expressed a prior interest in receiving it for research and educational purposes. If you wish to use copyrighted material for purposes other than “fair use” you must request permission from the copyright owner.

••••

Disclaimer: The information and opinions shared are for informational purposes only including, but not limited to, text, graphics, images and other material are not intended as medical advice or instruction. Nothing mentioned is intended to be a substitute for professional medical advice, diagnosis or treatment.

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of The Liberty Beacon Project.

Be the first to comment

Leave a Reply

Your email address will not be published.


*