Labour’s employment rights minister has insisted that the government’s Employment Rights Bill won’t scare firms out of hiring, amid growing concern among businesses over the impact of rising costs and bureaucracy.
Key private sector voices warn the bill will deter hiring, with more than half of employers polled by the Institute of Directors (IoD) warning the bill makes them less likely to hire new staff.
But in an interview with City AM, Parliamentary Under-Secretary for Employment Rights Justin Madders likened concerns about the bill to fears over the introduction of the minimum wage during the New Labour government.
The IoD poll also found that over a third would be looking to outsource roles abroad once the bill is passed, and over half would invest in automating jobs.
Madders suggested this polling has been influenced by “a lot of incorrect reporting around what this bill does.”
The IoD is just the latest employers’ group to cite additional bureaucracy and the risk of being subjected to expensive tribunal claims as major business concerns.
On the employment rights bill potentially scaring employers out of hiring, Madders said “this isn’t something that we want.”
Madders said the current debates around the bill are “reminiscent of what happened when [the] minimum wage was introduced,” as warnings of a chilling effect on hiring were issued by employers at the time.
Madders cited a study by the University of Cambridge on the employment rights bill that “concluded that actually it doesn’t end up being an impediment on growth,” but will boost recruitment and retention.
“We’re confident it’s going to be a positive for everyone in the labour market” the minister said, insisting that “we want to make sure businesses are comfortable with what we’re doing.”
In April, the UK’s leading business groups took the unusual step of writing to each member of the House of Lords, warning about the bill’s “deeply damaging” reforms to employment law.
Madders declined to comment on whether the Autumn Budget will include more tax hikes which affect employers, adding he “can’t predict what the budget is going to do.”
Madders also set out the government’s approach to supporting carers, helping them balance work with supporting disabled or ill family members.
When asked how the Department for Business and Trade (DBT) minister plans to ensure these workers’ needs – namely, unforeseen demands on their time – are accommodated by employers, Madders said: “A lot of businesses find retention is the biggest challenge that they have.”
