Business groups today urged peers to pass Labour‘s workers’ rights legislation despite their concerns with the package.
In a joint letter to Business Secretary Peter Kyle, six organisations said that ‘now is the time’ for Parliament to pass the Employment Rights Bill.
The Government’s flagship legislation is caught up in a battle between the House of Commons and House of Lords, where ministers have suffered a series of defeats.
In a bid to get the Bill passed before Parliament shuts down for Christmas later this week, ministers have made a series of concessions.
The Government has ditched a day-one right to protections against unfair dismissal and replaced it with a six-month qualifying period.
It also moved to scrap compensation caps for unfair dismissal, which are currently the lower of 52 weeks’ pay or £118,223.
The business groups had argued that the cash cap should have been retained, but increased to a higher sum.
But they said on Monday that the Bill – previously fronted by ex-deputy PM Angela Rayner – should now be passed in order to ‘avoid losing the six-month qualifying period’.
Business groups have urged the House of Lords to pass Labour’s workers’ rights legislation despite their concerns with the package
Business groups had previously warned that giving all workers the right to claim unfair dismissal from their first day in a job would discourage firms from hiring.
The letter to Mr Kyle was signed by the Confederation of British Industry, the British Chamber of Commerce, the Chartered Institute of Personnel and Development, the Federation of Small Businesses, the Recruitment and Employment Confederation and Small Business Britain.
It said: ‘We were pleased to take part in the constructive discussions with the Government and trade unions that led to the agreement on a six-month qualifying period for unfair dismissal.
‘This outcome came from meaningful, good-faith dialogue that enabled us to reach a consensus that represented a significant step forward which will have a positive impact on growth and opportunities.’
The business groups added: ‘We confirm our position in agreeing to the removal of the 52-week cap on claims for compensation for unfair dismissal, as this change effectively removes the cap for all but the highest-paid workers.
‘Unfortunately, we have not been able to reach a compromise that satisfies both the unions’ request for removal of the cash cap and our position of retaining it while raising the overall limit.’
In a joint letter to Business Secretary Peter Kyle, six organisations said that ‘now is the time’ for Parliament to pass the Employment Rights Bill
They warned the proposed changes ‘will impact how the compensation system works and will exacerbate the challenges facing the tribunal system’.
But they added: ‘On the Bill more broadly, we believe that the best way forward is to keep working with the Government and trade unions to find balanced solutions through secondary legislation.
‘To avoid losing the six months qualifying period, we therefore believe that now is the time for Parliament to pass the Bill.’
The business groups added they had concerns about ‘several other powers’ in the Bill – including measures on guaranteed-hours contracts, thresholds on industrial action and measures for seasonal and temporary workers – but ‘we are confident that workable agreements can be found in due course’.
Senior Tory MP Andrew Griffith, the shadow business secretary, said: ‘Different business groups will differ on the best tactic to secure any common sense from this Government.
‘But it’s clear not a single one supports scrapping the cash cap, which only benefits high earners and will lead to fewer jobs and lower growth.
‘On a day where we’ve seen vacancies falling further and post-Budget confidence on its knees, every business leader I speak to remains concerned about the Unemployment Bill and its damaging impact on hiring.
‘Labour simply don’t understand business which is why every Labour government leaves unemployment higher than when they take office.’
Mr Kyle said: ‘All parties – business, trade unions, Government and Parliament – have made difficult but necessary compromises to bring this Bill forward.
‘In that same spirit of compromise, during the remaining stages of this Bill I urge everyone to recognise that the elected representatives of business, trade unions and the people are committed to passing this Bill without further delay.’
The legislation is being considered by MPs on Monday and will return to the House of Lords on Tuesday.