Angela Rayner’s new Employment Rights Bill will cause harm to jobs as small businesses will recruit less staff.
The bill is designed to make it more difficult to dismiss employees as Labour will make changes to unfair dismissal legislation, which means from day one in the job staff could take the company to a tribunal.
The Federation of Small Businesses (FSB) has warned the government as a result 67% of their members will recruit fewer staff and 32% of businesses will cut staff numbers.
The FSB is calling on the government to make U-turn and keep to the one-year qualifying period to allow companies to grow and this will keep more people in work.
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The FSB conducted a survey and found that 56% of small businesses will now cancel or even scale back investment and will not expand their companies as result of Labour’s Bill.
Tina McKenzie, the 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.”
She added: “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.”
