Small Firms Need Time to Prepare for Employment Law Changes, FSB Says

The Federation of Small Businesses (FSB) has responded to news that the Employment Rights Bill has been granted Royal Assent and introduces major reforms for modern workplaces, focusing on greater flexibility, security, and fairness, with key points including day-one rights for sick pay/parental leave, new protections against “fire and rehire,” strengthened flexible working, improved zero-hours contract terms, and enhanced trade union rights, though day-one unfair dismissal protection was delayed

Tina McKenzie, Policy Chair of the Federation of Small Businesses, said: “We’re pleased to have been in the room with unions and the Government to successfully negotiate the six-month concession on day one unfair dismissal rights, because hiring is about finding the right fit for your business.

“However, with 65 per cent of small employers worried about the sheer number of changes the Bill will bring, the Government must clearly communicate what’s changing, phase in the implementation sensibly and give small firms adequate time to prepare.

“We can’t have a situation where small firms are scrambling to implement numerous changes at once, as it will cause chaos and have a huge impact on hiring. A staggered rollout, with the detailed rules being negotiated with FSB and other business groups, would show they understand the reality small firms are facing.

“There is also major work needed to soften the financial hit the Bill will deliver from bringing in the right to Statutory Sick Pay (SSP) from day one of employment, especially because SSP costs will rise in April. Small employers will be left completely exposed without knowing what they’ll owe from one month to the next. The Government needs to announce a rebate urgently.”