More than one in three U.K. employers plan to cut their hiring of permanent staff due to costs introduced by the government’s labour law reforms, a survey showed on Monday.
The Chartered Institute of Personnel and Development, a professional body for the human resources sector, said overall hiring intentions remained at their lowest level on record excluding the first year of the COVID pandemic, adding to the risks that an ongoing jobs market slowdown deepens.
The Labour Party government of Prime Minister Keir Starmer secured parliamentary approval for its Employment Rights Act in December. Original plans for protections against unfair dismissal for new workers were softened but new rules on sick pay, zero-hours contracts and union rights remained.
The CIPD said:
- Three in four employers expect the reform to increase employment costs and more than half said it would increase workplace conflict
- The government’s estimated headline cost of the reform of 1 billion pounds ($1.4 billion) does not reflect the full burden on employers including updating internal policies, communicating with staff, and training managers
- “It’s 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,” Ben Willmott, CIPD head of public policy, said.
- The median basic pay award remained at 3% for the seventh consecutive quarter, the survey showed
- The CIPD survey of 2,082 employers was conducted between December 18 and January 16
($1 = 0.7351 pounds)
(Writing by William Schomberg; editing by Suban Abdulla)
