Two of Britain’s best-known high street retailers have sounded the alarm over Labour’s new workers’ rights laws as youth unemployment soars.
After figures showing joblessness among the young at an 11-year high, the boss of hi-fi and TV chain Richer Sounds said the legislation could have a further negative impact on their prospects.
And electricals retailer Currys urged the government to ensure the Employment Right Act ‘doesn’t threaten the very jobs it’s designed to protect’.
The intervention comes after stark official figures last week showed unemployment among 18-24 year-olds at 14.5pc.
That prompted the British Retail Consortium (BRC) to warn of a ‘jobless generation’ of young people – who appear to be bearing the strain in the rise in joblessness across the economy.
Bosses fear the new rules – which include workers being offered a certain number of guaranteed hours – are not fit for industries reliant on seasonal and temporary work, and will pile further strain on a sector already struggling with rising costs.
Richer Sounds employs more than 500 staff in the UK
Writing for dailymail.co.uk, Richer Sounds boss Julie Abraham – whose business has 51 stores and employs more than 500 staff in the UK – said shops will decide not to hire if the reforms are botched.
She said some aspects of the bill ‘raise concerns’, adding: ‘If reforms unintentionally make it harder for businesses to offer part-time roles, the very opportunities that help young people enter the workforce could begin to shrink.’
And ‘unclear’ rules or ‘ambiguous’ wording could also cause many businesses to put hiring plans on ice, which would be ‘to the detriment of the millions of people currently searching for work,’ she said.
Abraham noted that the jobs market is ‘already under strain’, adding: ‘Worryingly, the very industry offering that vital first step into work is under immense pressure.’
She said the retail sector is facing ‘significant cost pressures’, with Labour’s policies from the last two Budgets piling more than £5bn in extra employment costs on last year.
That has forced many retailers to already take ‘difficult decisions about hiring, hours and investment,’ Abraham said.
‘When margins are tight, policies that add further cost or complexity to employing people inevitably make it harder to create new roles,’ she added.
Currys chief people officer, Paula Coughlan, told the Mail: ‘The Government says it believes in retail. Now it needs to show it – by ensuring the Employment Rights Act doesn’t threaten the very jobs it’s designed to protect.
‘Retail is the overlooked engine room of the UK economy, creating well-paid, flexible jobs in some of our most deprived communities, and giving millions of young people their first pay cheque and the skills to build a career.’
Retailers support fair work – but employment reform must work in practice
By Julie Abraham, CEO of Richer Sounds
A business is only as good as the people who work there. At Richer Sounds, our success over the past four decades has been built on the dedication, expertise, and loyalty of our fantastic colleagues. Many of our teams have spent years with us, passionate about what we sell, building up an extraordinary depth of product knowledge and developing trusted relationships with our customers and suppliers.
That experience matters. This is a big part of what makes Richer Sounds different. And this is why the future of employment reform matters so much to businesses like us. Retail supports the ambition behind the Employment Rights Act to strengthen worker protections and improve job security. Responsible businesses want fair workplaces and good conditions for their staff – principles that have long been part of our culture.
At Richer Sounds, for example, we do not use zero-hours contracts and have never considered fire and rehire. We believe in stable employment relationships and investing in people for the long term, because that is the foundation upon which strong teams and strong businesses are built.
It is therefore welcome that ministers have listened to employers on some aspects of the legislation. The Government is introducing some huge changes to employment law, such as Day One rights for workers, yet they have made the wise decision to couple this with properly managed probation periods.
Probation periods are a normal part of hiring, giving both employers and employees the chance to ensure a role is the right fit before committing for the long term. It means businesses are more likely to take a chance on young people, many of whom apply with little or no prior experience. Retail has long played a vital role in helping young people take their first step into employment. Around one in five UK adults say their first job was in retail, often on a shop floor learning teamwork, customer service and responsibility – myself included! Those early opportunities matter enormously in building confidence and experience.
At the same time, retailers are already under significant cost pressures. In the last year alone, the industry has seen more than £5bn in additional employment costs, forcing many businesses to make difficult decisions about hiring, hours and investment. When margins are tight, policies that add further cost or complexity to employing people inevitably make it harder to create new roles.
That matters because the labour market is already under strain. Youth unemployment now stands at around 16 per cent among 16-24 year-olds – the highest level in more than a decade. Worryingly, the very industry offering that vital first step into work is under immense pressure. The latest ONS figures show retail jobs down 68,000 on the previous year and nearly 400,000 lower than a decade ago – the lowest level on record.
This is why some aspects of the Employment Rights Act raise concerns. If reforms unintentionally make it harder for businesses to offer part-time roles, the very opportunities that help young people enter the workforce could begin to shrink. Similarly, if the rules are unclear or the language of the legislation ambiguous, then many businesses will take a cautious approach to hiring – to the detriment of the millions of people currently searching for work.
As the government develops the secondary legislation that will underpin the Employment Rights Act, continued engagement with employers will be essential. Responsible businesses are not asking for weaker protections. What we need is clarity and a framework that will actually work in practice. If we get that balance right, employment reform can strengthen worker protections while supporting the businesses that create job opportunities across the country.
That would be a result worth striving for.
