Labour’s employment plan faces backlash

According to a new report, Labour’s employment plan will harm hiring and lock people out of work.

These concerns have been raised by the UK’s smaller sized businesses, with 92% of SMEs saying they’re worried about the Employment Rights Bill and how it will affect recruitment and lead to a spiralling benefits bill.

One of the main concerns cited in the Bill is changes to unfair dismissal legislation, which would expand the grounds for employees to take their new employer to a tribunal from their first day in the job.

The Federation of Small Businesses (FSB) says that the Prime Minister must now show he “gets” the importance of creating and sustaining jobs by scrapping this part of the Bill, returning instead to the one-year qualifying period in place under the last Labour government.

Smaller sized firms say that the Bill would result in them:

• Recruiting less staff (as cited by 67%)
• Cancelling or scaling down plans for investing and expanding in the business (56%)
• Reducing their headcount before the measures kick in (32%)

Tina McKenzie, FSB’s Policy Chair, said, “Small firms have made it crystal clear that the Bill will not motivate them to hire more whatsoever. Their feedback is emphatic, resounding, and overwhelming.

“Ministers must show they get the risk to jobs and avoid a cavalier, dogmatic or patronising approach to the loud and clear feedback from small businesses. The economy is in no fit state for a ‘war on work’.

“If employers fear they will be sued, fewer will hire – with knock-on effects including a rising benefits bill and a lasting drag on living standards across the UK.

“These changes would have a severe negative impact on the real economy. All those who will be locked out of work as a result of this Bill deserve better from the Government.

“Removing new rules on day one dismissal processes from the Bill altogether, and returning to the one-year qualification period in place under the last Labour Government, is a more balanced approach and a cost-free route for the PM to show he gets it on the importance of creating and sustaining jobs.”

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