With 4 in 5 UK employers expecting costs to rise, the CIPD is urging government to consult with the people profession on a clear and phased implementation plan for the new legislation
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:
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.
“It’s essential that businesses, and smaller firms in particular, have adequate understanding and time to prepare for the changes. The success of the bill depends on effective consultation, a clear implementation plan, appropriate support and proper enforcement.”
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.
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.
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:
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.
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