Third of small companies plan to chop workers amid fears that Angela Rayner’s overhaul of staff’ rights will ‘wreak havoc’ on ‘a fragile’ UK financial system, business leaders warn
A third of small firms plan to axe staff amid fears that Angela Rayner’s overhaul of workers’ rights will ‘wreak havoc’ on an already fragile economy.
The Deputy Prime Minister’s plan includes expanding the grounds for unfair dismissal and could hit businesses with higher sick pay costs.
The Federation of Small Businesses (FSB) warned it could result in more people on benefits, a higher welfare bill and a ‘devastating hit’ to living standards.
‘If taking on staff becomes a legal minefield, businesses will simply stop,’ FSB policy chair Tina McKenzie said.
It comes after official figures this week showed that the number of job vacancies being advertised has tumbled as bosses have put the brakes on hiring.
Recruitment has slowed ahead of National Insurance and minimum wage increases from April, as well as the threat of Rayner’s shake-up of employment laws.
Research by the FSB found that in the final three months of last year 33 per cent of employers said they expected to cut staff numbers.
That was a sharp rise from the 17 per cent of businesses that said they were going to reduce their headcount in the previous quarter.
The Deputy Prime Minister’s plan includes expanding the grounds for unfair dismissal and could hit businesses with higher sick pay costs
The Federation of Small Businesses (FSB) warned it could result in more people on benefits, a higher welfare bill and a ‘devastating hit’ to living standards (file image)
The Workers’ Rights Bill could see zero-hours contracts scrapped and allow employees to claim unfair dismissal from day one (file image)
And only 1 in 10 small employers said they were planning to hire more staff at the end of 2024, compared to 14 per cent who had plans to recruit between July and September.
The Workers’ Rights Bill could see zero-hours contracts scrapped and allow employees to claim unfair dismissal from day one.
The shake up would also strengthen flexible working rights and remove some restrictions on trade unions.
Ms McKenzie added: ‘The figures speak for themselves – plans to allow employees to sue their employers on their first day of the job will wreak havoc on our already fragile economy, while changes to statutory sick pay will make employers think twice about their hiring plans.’
It could mean ‘more people on benefits, a ballooning welfare bill, and a devastating hit to living standards’, she said.
‘Those who will be shut out of work because of this Bill deserve better from the Government.’
