Employment Rights Bill: South’s businesses react

The UK government has published a new package of employment reforms, banning exploitative zero-hours contracts and ending fire and rehire practices.

It’s also ushered in stronger dismissal protections for pregnant women and new mothers, as well as parental and bereavement leave and other protections from day one on the job.

Labour says its Employment Rights Bill represents “the biggest upgrade to workers’ rights in a generation” – though many of the details are still being worked out before the new laws are due to take effect in Autumn 2026.

So, how have business leaders and organisations across the South reacted to the bill?

Jane Gratton, deputy director of public policy at the British Chambers of Commerce, said: “These are huge changes, and businesses must be engaged and supported on them every step of the way.

“If the right balance is struck, then we have the potential to get more people into work and boost economic growth.

“But if the process is mishandled, there’s a danger these changes could have the opposite effect.

“It’s important to stress that the legislation we are seeing today is a starting point. It’s setting out a framework, and the detail and the mechanics of how this will operate will still need much further consultation.

“We’ll continue to work with government and the unions to ensure that a balance is reached – one that encourages businesses to recruit and has the right support for employees.”

Ian Girling, chief executive of Dorset Chamber, said many of the county’s employers were concerned about how measures might be implemented – particularly in the case of day one rights.

“We understand the need for legislation to protect the rights of employees and ensure that they are all treated with respect and care in the workplace,” he added.

“The new laws must achieve a fair balance that provides the right support for employees while encouraging businesses to recruit and allowing them to grow.

“We’ve been lobbying our local MPs and working with the British Chambers of Commerce and will continue to make Dorset’s voice heard during the consultation process and passage of the bill.

“Finally, it’s important to recognise that the overwhelming majority of businesses in Dorset care about their people and treat them with the respect they deserve.”

Vicky Schollar, head of employment at Berkshire-based law firm Gardner Leader, said the reforms were “positive” – but warned “there’s a risk that the changes will not have the desired effect of boosting levels of employment and living standards.

“There’s also a risk that employers will see an increase in claims for unfair dismissal, leading to more time and costs in dealing with them.

“The much-anticipated changes to zero hours contracts and the ability of employers to fire and rehire employees is perhaps not as significant as originally anticipated.”

Carole Gaskell is founder and CEO of Full Potential Group, a leadership training business in Buckinghamshire.

She said: “The proposals represent what could be an important and positive shift in workplace transformation.

“If employers truly care about their workforce and want to create inspiring, motivating places to work where people can fulfil their potential and achieve a healthy work-life balance, then the new bill should merely be a tick-box exercise for them.  

“The UK is suffering from a culture of low motivation and lack of communication and trust.

“Removing the two-year qualifying period to ensure that workers have protections from unfair dismissal from day one on the job will support more people into secure work and help to boost productivity, which is critical for growth.

“This will provide invaluable insight to keep staff motivated and give organisations clear strategies to help build motivated, high-performing workforces.”

Kate Brooks, partner and head of employment at South Coast law firm Ellis Jones, noted that the government is aiming to be both pro-business and pro-worker with the new bill.

“It’s sensible for employers to act now to review existing contracts and staff policies,” she added.

“It will certainly be more important than ever to have clear policies and processes in relation to, for example, fair reasons for dismissal such as performance, sickness or conduct.

“Changes such as updates on the obligation to take reasonable steps in respect of preventing sexual harassment mean that employers must have a policy covering these steps.

“It will also be necessary to train managers on all the legislative changes and let wider staff know what to expect.”

Stephen Moore, a Bristol-based employment lawyer at Ashfords, said: “While employers are supportive of these reforms, our clients are voicing growing concerns about the financial and operational strain they could have on their business if they are not provided with sufficient government support. 

“Implementing the changes could cost SMEs anywhere between five to 10 per cent of their gross profit – a prospect that could be financially crippling.

“For large corporations with deep pockets, it’s far easier to absorb the costs and structural changes.

“But for small and medium-sized enterprises who make up 99 per cent of the UK business population, the additional financial strain could force them to make difficult choices, such as reducing staffing, freezing wages or cutting benefits.

"The bill seeks to protect employees, but if a careful balance is not struck, it could end up severely damaging the businesses that employ those the bill seeks to protect.

“Unless support is provided to employers to help meet the new obligations, we risk well-intentioned reforms ending in business closures, job losses and ultimately a weakening economy.”

Ross McNally, chief executive of Hampshire Chamber, said: “The bill must achieve a fair balance between support for employees in their working lives and scope for businesses to continue to recruit and retain staff and grow.

“Although most of the measures won’t be in place immediately, we recommend our members and other employers act now to review their existing contracts and staff policies.

“They’ll have to train relevant managers on the legislative changes to be enacted and let wider staff know what to expect.

“It will certainly be more important than ever to have clear family-friendly processes in place and specifically on issues such as what may be considered fair reasons for dismissal.

“But there is a quid pro quo here. While enhanced workers’ rights are a good thing, employers preparing for the changes still need to plug the enduring skills gaps that have long plagued the UK economy.

“We call on the government to support employers here in Hampshire, whether they’re in private business, the third sector or the public sector, by partnering with organisations such as ours on skills development strategy.”

We will continue to update our coverage as reactions come in. To share your thoughts on the bill, email us at [email protected]