IoD press release Cost of employment crisis highlights need for pragmatic reform
Responding to the latest ONS labour market data, Alex Hall-Chen, Principal Policy Advisor for Employment at the Institute of Directors, said:
“Today’s data shows stagnation in employer demand for labour, with unemployment steady at 5.2% and a slight decrease in vacancies in the latest quarter.
“UK businesses are experiencing a cost of employment crisis, exacerbated by the Employment Rights Act, increased employer National Insurance Contributions, and several years of above-inflation minimum wage increases. The cost pressures arising from the conflict in the Middle East are also set to place an additional strain on employers, many of whom may look to employment as an area to make savings.
“This week’s announcements on youth unemployment contained some welcome steps to encourage employers to hire young people. However, if the government is serious about tackling the increase in unemployment, particularly youth unemployment, it must take a more pragmatic approach to employment reform.
“Specifically, we are calling on the UK government to adopt the following changes to its implementation of the Employment Rights Act:
- Exempt employers with fewer than 100 employees from trade union access provisions.
- Increase the planned reference period for the entitlement to guaranteed hours to 52 weeks.
- Reintroduce the Statutory Sick Pay rebate for SMEs.
- Adjust implementation dates to give employers more time to prepare for the most complex reforms, including changes to protection against unfair dismissal and trade union access to workplaces.
“Without these changes, businesses will remain constrained in their ability to hire, risking further increases in unemployment.”
