The Employment Rights Act Insights from employers
New research from the Institute of Directors reveals that over eight in 10 (86%) business leaders believe that the Employment Rights Act will have a negative impact on UK economic growth. This represents an increase from 72% since the same research was conducted in May 2025.
As revealed in the IoD’s new policy paper, The Employment Rights Act: insights from employers, the research also explores how business leaders are responding to the Act as its measures begin to come into force. Almost two thirds (63%) report being less likely to hire new staff and over half (57%) state that they are more likely to invest in automation.
In the paper the IoD calls on government to:
- Exempt employers with fewer than 250 employees from trade union access provisions.
- Increase the planned reference period for the entitlement to guaranteed hours to 52 weeks and set the low hours threshold at eight hours.
- Reintroduce the Statutory Sick Pay rebate for SMEs.
- Adjust the implementation timeline to give employers more time to prepare for the most complex reforms, including the introduction of additional protections against unfair dismissal and trade union access to workplaces.
About the author
Alex Hall-Chen is Principal Policy Advisor for Sustainability, Employment, and Skills at the IoD. She previously worked in education research and as a Policy Advisor at the CBI. She holds a BA in Politics and Sociology from the University of Cambridge and an MSc in Comparative and International Education from the University of Oxford, and is a school governor for the Thinking Schools Academy Trust.
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