The Government have [Tuesday 4 March] tabled amendments to the Employment Rights Bill following weeks of consultation and responses from business groups, trade unions and wider civil society, which industry leaders describe as a “missed opportunity” to help businesses.
First introduced in October 2024 as part of Labour’s Plan to Make Work Pay, the government describes the projected legislation as the “biggest change to workers’ rights in a generation” and aims to boost both productivity and security for workers.
In a press statement ahead of the full amendments being published, the government confirmed some details of the changes, and said its plan was a “core part of the mission to grow the economy, raise living standards and create opportunities for people across the country”, with the amendments “tackling the low pay, poor working conditions and poor job security that has been holding the UK economy back”.
Deputy prime minister Angela Rayner said: “For too long millions of workers have been forced to face insecure, low-paid and irregular work, while our economy is blighted by low growth and low productivity.
“We are turning the tide – with the biggest upgrade to workers’ rights in a generation, boosting living standards and bringing with it an upgrade to our growth prospects and the reforms our economy so desperately needs.”
Following the amendment announcement Tina McKenzie, Policy Chair of the Federation of Small Businesses (FSB), said: “The Government has missed an opportunity today to intervene and help businesses cope with Make Work Pay. It needs to focus more on building up businesses’ confidence to hire and grow.
“Ministers must put the work in and understand the damage that taking such a threatening approach to hundreds of thousands of small employers will do. At the end of the day, small business owners are out there trying to grow their businesses, create jobs, and contribute to their communities.
“The chief concerns among small businesses remain the threat of being taken to court as soon as they take a risk hiring someone, the affordability of proposals on sick pay, and the sheer unworkability of other parts of this mass of complex new rules.
“We hope the Government will move from asserting that these changes are pro-business to making that a reality.”
Kate Nicholls, Chief Executive of UKHospitality, said: “The business world has fundamentally changed since the publication of the Employment Rights Bill, with significant increases to employer NICs upending the finances of hospitality businesses. Everything must now be viewed in that context.
“We understand the Government’s objectives with this legislation, but how it achieves those goals must be done in a way that doesn’t damage jobs, businesses and growth.
“Some of the changes announced offer practical clarifications on how new regulations will work, but it’s still the case that there is much unknown about how this legislation will work in practice, a lack of detail on several key issues and the scale of the cost these changes will bring.
“With substantial consultation still to come on major parts of the legislation, it’s critical that the Government continues to work with us to answer these questions and get the detail right in a way that benefits both businesses and team members