A number of industry bodies have called on MPs to back key amendments to the Employment Rights Bill put forward by the House of Lords last week.
The amendments were added as the bill went through the House of Lords report stage.
Amendments include changing the qualifying period for unfair dismissal from two years to six months, rather than making it a day one right, and backing more consultation on changes to zero-hours contracts, flexible working, statutory sick pay (SSP) and unfair dismissal before bill requirements are finalised.
Further amendments introduced by peers include keeping the union voting turnout threshold at 50 percent for it to be valid and employees getting a right to request a guaranteed hours contract after 26 weeks rather than employers having to continuously offer such contracts even if workers prefer their current flexible arrangements.
British Chambers of Commerce deputy director public policy Jane Gratton said: “Some of the amendments made to the Employment Rights Bill in the House of Lords over recent days give businesses real hope.
“Peers have rightly recognised there needs to be a more balanced approach to this legislation. It needs to be proportionate, affordable and right for both firms and their employees.
“These changes to some of the key measures in the bill will help ensure employers have the agility and flexibility to respond to change, to innovate and remain competitive.
“When parliamentarians return in September, it’s vital that these amendments are backed and delivered. To grow the economy and create more opportunities for people across the country, the government must focus on removing costs, complexity and barriers for business.”
The Federation for Small Businesses (FSB) also called for MPs to accept peers’ bill amendments. The FSB’s latest small business index revealed that more small firms are expecting to shrink, close or sell up than to grow over the next year.
Pointing to a rise in the unemployment rate, which ONS data show increased to 4.7 percent in June, FSB’s policy chair Tina McKenzie said: “These figures add to a weight of evidence that if you make it more expensive and riskier to give someone a job, the result will be fewer jobs. Ministers should start basing policymaking on real-world evidence rather than being swayed by well-intentioned, but misguided, wishful thinkers.”
The FSB also called for an SSP rebate to be introduced for small employers in its evidence to the Low Pay Commission.
Alex Hall-Chen, principal policy advisor for employment at the Institute of Directors (IoD), also pointed to the “softening labour market” saying that the slump in the demand for labour is the “predictable result” of increases in employer national insurance, the Employment Rights Bill, and above-inflation increases to the National Living Wage.
“With IoD research showing that more business leaders plan to reduce their employee headcount over the next year than increase it, this situation is unlikely to improve any time soon.
“A significant rethink is needed if the government is to meet its aims of driving economic growth and increasing the employment rate. The government’s commitment to consult on the detail of secondary legislation associated with the Employment Rights Bill is welcome, but will have no effect on hiring unless it is genuinely used to listen to and address the concerns of employers.”
