Employers need clarity and support on Employment Rights Bill, as CIPD data reveals risk of job losses

A CIPD survey of more than 2000 employers in the UK has found that new laws under the Employment Rights Bill could inadvertently trigger job losses, reduced hiring and cutbacks in training and development – unless employers get more clarity, support and guidance to mitigate their concerns.  

Our survey found that 79% of organisations expect measures planned as part of the Employment Rights Bill to increase employment costs. These measures include changes to things like unfair dismissal rules, Statutory Sick Pay and the right to guaranteed hours for those on zero-hours contracts. 

To help ensure the Bill is workable and serves to improve working practices, we’re calling on the UK Government to: 

1. Give employers – particularly small businesses with limited HR support – adequate time and support to implement new measures.  
2. Consult meaningfully with employers and the people profession on the details of the bill still to be decided through secondary legislation, such as the new statutory probation period and any new process for dismissing new staff fairly.   
3. Invest in additional resources for Acas, the Central Arbitration Committee and the employment tribunal system, to cope with the expected increase in workplace disputes.  
4. Place more emphasis on enabling unions and employers to develop effective social partnership and employment relations skills. 

Cumulative costs could impact workforce investment and undermine productivity 

Among employers that expect their costs to increase because of measures in the Employment Rights Bill, 30% said they would likely have to reduce headcount through redundancies and reduced hiring. 23% said they would introduce or increase their adoption of automation, and a similar number expect to make cutbacks in their training budget. 
 
Recent increases in employer National Insurance costs and the National Minimum Wage, are also forcing some employers to scale back their investments in their workforces. The cumulative effects of these rising costs could ultimately undermine efforts to boost economic productivity. 

Calling for a clear implementation plan to guide employers and HR teams 

When asked which forms of support would be most helpful, 40% of employers told us they’d like guidance from the government on implementing the changes. A third asked for support from professional bodies, such as the CIPD, and training materials for their HR teams and line managers. 

In particular, employers are seeking support to develop new policies that align with legal requirements. This highlights the vital role the people profession will play in helping businesses understand the new requirements and how they impact workplace policies and day-to-day working practices. 

Top of employers’ concerns are the proposed changes to unfair dismissal rules and new rights for trade unions. While we’re yet to see any significant detail on these from the government, we’ve called for more emphasis on supporting unions and employers to develop effective partnerships and employment relations skills. 

Supporting smaller businesses to avoid accidental non-compliance 

As well as rising costs, there’s a real risk of accidental non-compliance, especially for smaller employers with limited or no HR resources. The government’s impact assessment estimated a 15% increase in employment tribunal claims as a result of the bill’s measures. 

Alongside support for employers, we’ve highlighted the need for additional resources for Acas, the Central Arbitration Committee and the employment tribunal system to help them cope with increased demand. 

How we’re representing the voice of the people profession 

As your professional body, we’re committed to helping you understand how the changes will impact your work and supporting you with a range of practical resources, including:     

• Member-exclusive tracker with the latest employment law changes and advice on how to prepare.   

• ‘Focus on Make Work Pay’ page with all the latest developments.   

• Response and comment in our People Management Magazine.   

• Regular updates to our content, as and when there are developments.  

We’re also actively engaging with the government to develop support and guidance for employers and represent the views and expertise of the people profession. We’ll continue to gather insights and views from the profession and ensure they’re heard at the highest level.