Employment reforms need considerable thought to not ‘swamp business’
A legal group urged Parliament that the Employment Bill needs “considerable thought” to avoid “swamping business” with costs or obligations that “confuse even senior and experienced lawyers.”
In written evidence provided to the Committee overseeing the Employment Rights Bill, the Employment Lawyers Association (ELA), a group of 7,000 lawyers, urged the government to reconsider some of the changes contained within the bill.
The ELA stated that the zero-hour contract changes “will grant workers rights that are so difficult to navigate that this may well impact their ability to be enforced” while placing difficult “recurring burdens on employers”.
Labour’s employment overhaul was laid out in October with 28 individual measures in the Bill, including ending exploitative zero-hour contracts and banning fire and rehire tactics.
A report published in the same month broke down each of the measures and their associated costs. Ending zero-hour contracts is likely to cost up to £1bn a year, while reforms to day-one employment rights come with a price tag of around £100m a year in new business costs.
The overall cost predicted that British businesses will face was around £5bn due to this legislation.
The ELA warned the political Committee: “It is fanciful to think that a non-unionised low paid zero hour worker will issue proceedings for breaches for small sums that will not reach Tribunals for many months or even years”.
The organisation added: “If these regulations are to work, then the enforcement provisions should be opened up to the Fair Work Agency and not simply rely on low-paid workers to enforce their rights.”
The lawyers stated that the consequence of the wording of the fire and rehire policy “means that businesses that previously survived may now not be able to act until it is too late and then go
under.”
The ELA warned the MPs that if these new rights are passed, they will lead to “further claims,” causing activity to soar at the Tribunals.
Employment Tribunal claims outstanding
The group informed the government that, as of June 2024, 668,000 Employment Tribunal claims were outstanding, while the caseload grew by four per cent in the previous year.
Chair of ELA, Caspar Glyn KC told CityAM: “In April of this year the Tribunals were reporting that most short cases could be held in 4-8 months but in four Tribunal Centres. However, cases that took 3-5 days’ of Tribunal Time were taking about a year in most Tribunals and even longer in one London Tribunal.”
“The Tribunal cannot deal with the work that it has,” it stated. On top of this, it added that “lawyers are expensive both for workers and for businesses”.
The ELA highlighted: “The transactional cost of enforcing rights is often not worth the expense of doing so. A net £70 for a cancelled shift? Who is going to bother enforcing that?”
The Committee, which includes Sir Ashley Fox MP and Dame Nia Griffith MP, next sits on Thursday to further consider the Bill.