Recruiters have warned that Angela Rayner’s proposed overhaul of staff’ rights may drive employers to sack employees who fall unwell for prolonged intervals, as companies grapple with new price burdens at a time of escalating employment bills.
Underneath the federal government’s plans, workers will be capable to declare statutory sick pay (SSP) from the primary day of absence as an alternative of the fourth. The earnings threshold, presently set at £123 per week, shall be scrapped, making extra folks eligible for SSP. Whereas hailed as a lift to office assist, critics say the transfer dangers saddling companies—particularly small corporations—with unsustainable prices.
Shazia Ejaz of the Recruitment and Employment Confederation (REC) warned that increased outlays stemming from the reforms may encourage employers to “move swiftly to capability-based dismissal” if employees stay off work for prolonged intervals or undergo repeated absences. She added that smaller companies, which make up a considerable share of the labour market, would shoulder 60 per cent of the additional SSP prices.
With the federal government’s wider employment reforms additionally together with a £25 billion rise in employers’ Nationwide Insurance coverage Contributions and the latest in a sequence of sharp minimal wage will increase, firms face a mounting tally of extra prices. Ms Ejaz mentioned: “A balance between worker support and business sustainability is necessary.” Setting SSP at a extra manageable stage may, she suggests, encourage employers to retain employees quite than resorting to layoffs.
The proposed measures kind a part of a broader bundle to reinforce staff’ rights, which incorporates tighter restrictions on zero-hours contracts and harder guidelines in opposition to “fire and rehire” practices. Deputy Prime Minister Rayner has described it as “the biggest upgrade to rights at work for a generation,” claiming it should elevate each pay and productiveness in a modernised employment panorama.
Nonetheless, the Regulatory Coverage Committee, an unbiased physique charged with scrutinising new laws, branded the bundle “not fit for purpose” resulting from inadequate evaluation of how companies will cross on these prices. Authorities estimates put the annual price ticket for companies at greater than £4.5 billion.
Company staff are set to be significantly hard-hit by the growth of SSP eligibility, Ms Ejaz mentioned, with businesses prone to shoulder the lion’s share of the monetary burden quite than passing it onto shoppers. Confronted with increased prices, companies are anticipated to reply by reducing job creation, limiting wage development, or elevating client costs, in line with current surveys.
A spokesman for the Division for Work and Pensions defended the adjustments, arguing that nobody must be pressured to decide on between well being and monetary hardship. “These reforms as part of the Employment Rights Bill will support people managing a health condition to stay in work and raise living standards across the country,” he mentioned. The division is now reviewing responses to a public session, promising to proceed “at pace” because it shapes the ultimate laws.
