Workers' rights reforms prompt a third of employers to curb hiring

"More than a third of UK employers are planning to scale back permanent hiring as a result of the government's new workers' rights reforms, according to a survey by the Chartered Institute of Personnel and Development (CIPD). The poll of 2,000 businesses found that 37 per cent intend to reduce recruitment of new permanent staff once the changes take effect, while more than half expect an increase in workplace conflict."

"Employers warned that the new Employment Rights Act, which introduces expanded protections including day-one statutory sick pay, easier trade union recognition and a shorter qualification period for unfair dismissal claims, could act as a "further handbrake on job creation". Government estimates suggest the legislation will cost businesses around £1bn annually. However, the CIPD said the official analysis may underestimate the true impact, particularly the additional time and administrative burden placed on HR departments to implement the reforms."

"Ben Willmott, head of public policy at the CIPD, said the changes risked compounding pressures already faced by employers following last year's £24bn rise in employer national insurance contributions. "There is a real risk that these measures will act as a further brake on recruitment," he said, urging ministers to consult meaningfully with business and consider compromises where appropriate. The survey found that 55 per cent of employers anticipate more disputes once the reforms are in place."

A CIPD survey of 2,000 businesses found 37% of employers intend to reduce recruitment of new permanent staff when the Employment Rights Act takes effect, and 55% expect more workplace disputes. The act expands protections including day-one statutory sick pay, easier trade union recognition, shorter unfair dismissal qualification periods and new rights for zero-hours workers. Government analysis estimates a £1bn annual cost to businesses, but the CIPD warns this may understate additional time and administration burdens on HR. Employers also cite pressure from last year’s £24bn rise in employer national insurance contributions.

Read at Business Matters