{"id":2150,"date":"2026-02-16T00:08:06","date_gmt":"2026-02-16T00:08:06","guid":{"rendered":"https:\/\/www.thebusinessdesk.com\/scotland\/?p=2150"},"modified":"2026-02-13T14:11:43","modified_gmt":"2026-02-13T14:11:43","slug":"employment-rights-act-risks-being-handbrake-on-hiring","status":"publish","type":"post","link":"https:\/\/www.thebusinessdesk.com\/scotland\/news\/2150-employment-rights-act-risks-being-handbrake-on-hiring","title":{"rendered":"Employment Rights Act risks being &#8216;handbrake on hiring&#8217;"},"content":{"rendered":"<p>More than a third (37%) of British businesses plan to reduce the recruitment of permanent staff due to at least one or more of the Employment Rights Act\u2019s (ERA) key reforms, while overall hiring intentions remain at their lowest level on record, outside the first year of the pandemic.<\/p>\n<p>The latest quarterly survey from the Chartered Institute of Personnel and Development (CIPD) &#8211; carried out among more than 2,000 UK employers &#8211; asked about hiring plans and incidence of workplace conflict due to the legislation which give day one statutory sick pay, reduce the unfair dismissal qualifying period from two years to six months, make it easier for trade unions to achieve statutory recognition and access workplaces for recruitment, as well as giving guaranteed minimum hours contract offers, advance notice of work schedules and compensation for shifts cancelled at short notice.<\/p>\n<p>Almost three quarters (74%) expect the Act to increase employment costs, while more than half (55%) of employers expect workplace conflict to increase because of at least one or more of the changes being introduced.<\/p>\n<p>The survey found that the net employment balance &#8211; the difference between employers expecting to increase staff levels and those expecting to reduce them in the next three months &#8211; remains low at +7 this quarter; the lowest level on record outside of the pandemic. Among employers that anticipate recruiting fewer permanent staff because of the Act, the net employment balance is -5.<\/p>\n<p>More than half (55%) of employers expect workplace conflict to increase because of at least one of the changes being introduced. Just 4% of employers believe workplace conflict will decrease because of the new trade union measures and 11% say they don\u2019t know how the ERA measures will impact workplace conflict.<\/p>\n<p>In response, the CIPD is calling on the UK Government to:<\/p>\n<ul>\n<li>Continue to consult meaningfully with employers and business bodies and, where necessary, compromise on key measures still to be finalised to ensure they can be implemented without adding to the costs and legal risks of recruiting and managing staff.<\/li>\n<li>Launch a communications campaign as soon as possible to ensure employers &#8211; and small firms in particular &#8211; understand, are aware of and can prepare for new legal obligations in advance of them coming into force.<\/li>\n<li>As part of the review of the dispute resolution system, ensure that Acas has sufficient resources to help employers &#8211; and SMEs in particular &#8211; comply and avoid costly and disruptive conflict and employment tribunal claims.<\/li>\n<\/ul>\n<p>Ben Willmott, head of public policy at the professional body for HR and people development, said: \u201cAgainst a backdrop of low business confidence and already weak hiring intentions, our research suggests there is a real risk that the ERA measures will act as a further handbrake on job creation and recruitment.<\/p>\n<p>\u201cIn response, it\u2019s important that government acts to try and mitigate these potential negative consequences, including through meaningful consultation and where necessary compromise on key measures still to be decided in secondary legislation.<\/p>\n<p>\u201cWe need to see a major communication campaign to ensure smaller businesses in particular are aware of, understand and can prepare for the new legal obligations and know when they come in to effect.\u201d<\/p>\n<p>While the headline cost of the ERA has been estimated by the government at \u00a31bn, the CIPD warns this doesn\u2019t reflect the full administrative and operational burden on employers, which will include updating internal policies, communicating with staff and training managers.<\/p>\n<p>Current government estimates suggest it will take just an hour or less for employers to familiarise themselves with many of the changes, but the CIPD believes these assumptions significantly underestimate the time required to update payroll systems, internal policies and training for both HR professionals and line managers to be able to manage the legislative changes and to work effectively with unions.<\/p>\n<p>Willmott added: \u201cGiving organisations the time and support they need will be essential if these reforms are not to undermine employment growth or increase workplace disputes and employment tribunal claims &#8211; smaller businesses in particular will need clear advice and guidance to avoid unintentionally falling foul of the new laws.\u201d<\/p>\n<p>Elsewhere in the Labour Market Outlook, the research revealed that the median basic pay award remains at 3% overall, for the seventh consecutive quarter.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Employer survey reveals fear of rising costs and conflict due to the new legislation<\/p>\n","protected":false},"author":278857,"featured_media":2152,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[53262,120782,127720],"coauthors":[137126],"class_list":["post-2150","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-news","category-economy","category-skills","tag-featured-story","tag-national"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Employment Rights Act risks being &#039;handbrake on hiring&#039;<\/title>\n<meta name=\"description\" content=\"Employer survey reveals fear of rising costs and conflict due to the new legislation.\" \/>\n<meta name=\"robots\" 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