Business groups say workers’ rights to ‘cost jobs and cause chaos’

A raft of workers’ rights that come into force today threatens to cause chaos for employers, Labour has been warned.

The changes under the Employment Rights Act – which became law last year – include the right to statutory sick pay (SSP) from the first day of illness instead of on the fourth day.

Other reforms taking force today include making paternity leave a ‘day one right’ rather than being available only after six months in the job.

Business groups say the Act threatens to crush growth and jobs at a time when they are already struggling with other costs imposed by the Government, such as National Insurance hikes, minimum wage increases and botched business rates reform. And it comes as they now face a fresh headache caused by the war in the Middle East, which is driving up energy and other costs while at the same time threatening to cause a cost-of-living crisis which will kill demand.

It follows steep rises to the minimum wage that came into force last week. Neil Carberry, chief executive of the Recruitment and Employment Confederation, said: ‘The pressure on firms right now is to reduce employment and raise prices to make ends meet.’

And with youth joblessness at an 11-year-high, he added: ‘All of this jeopardises employment creation and could supercharge youth unemployment in particular.’

Further changes to be introduced at a later date in stages up to 2027 include guaranteed minimum hours for those on zero or low hour contracts.

Carberry said plans to introduce the minimum hours rule were ‘totally unworkable as currently conceived’.

He added: ‘The changes to statutory sick pay introduced this week will also cause chaos if not coupled swiftly with better guidance for firms, as a small minority of workers will try to defraud firms.’

Tom Way, chief executive of the UK and Ireland division of recruitment giant Hays, said: ‘The legislation is designed to make work fairer, but has added another layer of complexity to decisions businesses were already taking longer to make.’