What do you think about these changes to workers' rights that Labour are bringing in?
The UK government is introducing a major overhaul of workers' rights with the Employment Rights Bill, aimed at providing more benefits like sick pay and parental leave from day one. While this is set to affect millions of workers, it also raises important questions for businesses—especially small and medium enterprises (SMEs)—about how these changes will impact their operations.
Key Changes:
Sick Pay: Employees will now be eligible for Statutory Sick Pay (SSP) from the first day of illness, which could result in increased short-term costs for businesses. However, this might improve worker satisfaction and retention.
Parental and Bereavement Leave: New hires will be entitled to unpaid parental and bereavement leave immediately, rather than after months of service, which could create staffing gaps for SMEs already working with lean teams.
Flexible Working: Employers will need to consider flexible working requests from the first day of employment. While this provides workers with more options, it may create operational challenges for SMEs with fewer resources to manage such flexibility.
Zero-Hours Contracts: Workers on these contracts will be offered guaranteed hours based on their recent work history. While this adds structure to unpredictable schedules, it could also reduce the flexibility SMEs have relied on when adjusting labour to demand.
Business Concerns:
Many SMEs are cautious about the potential costs and logistical difficulties that could arise from these changes. Tina McKenzie, policy chair at the Federation of Small Businesses, described the bill as potentially burdensome, particularly for smaller firms that may lack the resources to quickly adapt to new regulations. For instance, offering sick pay from day one and navigating new rules around flexible working could strain limited HR capacities.
Dominic Ponniah, CEO of Cleanology, highlighted how the changes might affect hiring decisions. He mentioned that firms may become more selective about new employees, given the added complexity around sick pay, unfair dismissal, and extended probationary periods.
Opportunities for SMEs:
Despite concerns, some business leaders see potential benefits. Ann Francke of the Chartered Management Institute noted that many progressive businesses have already implemented aspects of these changes. By adopting more flexible and supportive policies, SMEs could see improved employee morale and productivity, making them more attractive workplaces in the long run.
For smaller businesses, the two-year delay before most changes take effect allows time to prepare. SMEs can begin planning now—reviewing policies, adjusting recruitment strategies, and consulting with HR experts to ensure they’re ready when the new laws come into force.