A third of employers are responding to the Employment Rights Bill by cutting jobs

A survey of more than 2,000 employers conducted by the CIPD reveals that nearly four in five anticipate increased employment costs as a result of the Employment Rights Bill’s proposed measures, and nearly a third are planning on reducing headcount as a result. The measures include reforms to Statutory Sick Pay, changes to unfair dismissal rules, and the introduction of guaranteed hours for zero-hours contract workers. Among those expecting costs to rise, 30 percent foresee reducing their workforce through redundancies or cutting back on recruitment, while 23 percent plan to introduce or expand automation to offset expenses. Other strategies being considered include reducing training budgets (22 percent), cutting staff working hours (17 percent), or increasing reliance on temporary workers (17 percent).

Employers are particularly concerned about changes to unfair dismissal rules and the expansion of trade union rights. The removal of the qualifying period for unfair dismissal and the introduction of a statutory probation period have been identified as the most likely triggers for redundancies. Additionally, proposed changes that would make it easier for trade unions to gain recognition and access workplaces could significantly alter employment relations. This, the CIPD warns, will require both unions and employers to strengthen their social partnership and negotiation skills.

The CIPD has urged the government to provide greater clarity and support for employers as businesses brace for rising costs due to the Employment Rights Bill. With hundreds of new amendments introduced this week, the professional body is calling for a structured implementation plan to help organisations understand and prepare for the changes, while also addressing concerns over job losses and reduced hiring.

In response to these concerns, the CIPD is calling on the government to consult more extensively with employers before finalising key measures through secondary legislation. It also emphasises the urgent need for a well-structured implementation plan to provide businesses—particularly smaller firms—with the necessary guidance and support to comply with the new regulations and manage costs effectively.