Small Businesses Raise a Red Flag on the New Employment Rights Bill
FSB’s latest briefing tells the government that the latest draft of the Employment Rights Bill, approved flat‑out by the Regulatory Policy Committee (RPC), is as well‑intended as it is ill‑prepared.
What the RPC Found
- Out of 23 impact assessments, 8 were deemed “not fit for purpose.”
- These blue‑sky ideas cover some of the bill’s biggest measures—think “formal dismissal from day one” and other high‑stakes rules.
- Every red‑tick feels like the policy committee was, at best, rushing through the review.
FSB’s Takeaway
Policy Chair Tina McKenzie slammed the findings as “a sharp wake‑up call” for ministers who “are treating jobs and work as a disposable commodity.” She warned that the bill would pile cost and risk on tiny employers, on top of a shaky evidence base.
“Jobs, wages, and living standards will suffer if Government fails to bring forward sensible policy or do the work to understand how and to what extent it is making employment harder and harder to provide,” McKenzie said.
Where the Trouble Lies
- Red‑flagged impact assessments show that the bill’s design is incomplete—the government hasn’t quantified the actual impact on employers or workers.
- Small employers—who already juggle tight budgets—could find themselves paying a price that the lawmakers didn’t even calculate.
- Future business owners will have to wrestle with paperwork and penalties that weren’t justifiable, according to the regulations’ own analysis.
What Should Parliament Do?
FSB urges lawmakers to:
- Re‑engage with ministers and demand a proper, evidence‑backed review.
- Re‑write “heavy‑handed” sections that threaten to lock employers into costly compliance traps.
- Ensure that any policy changes genuinely ease, not harden, the market for hiring.
Bottom Line
If the government wants to keep small businesses alive, it needs to step back, rethink its agenda, and do the heavy lifting of research and impact measurement. Otherwise, we’re looking at a workforce that’s officially being built with a hammer, but without a plan for where the nails will land.
