By Andy McDonald, MP
The Employment Rights Bill passing through Parliament, is the most meaningful upgrade to UK employment law in decades and should deliver concrete change to reverse the slow erosion of workers’ rights, security, and real wages.
Yet employer groups are sounding the alarm. Lobbyists from employer organisations warn that this landmark legislation will scare employers, flood firms with red tape and ultimately reduce recruitment.
But behind headlines of ‘costly burdens’ and ‘regulatory thickets’ there is a more hopeful reality: this Bill, far from being a threat to jobs, is a path to fairer, more secure, and more productive employment – exactly what Britain’s labour market needs.
Yes, the business concerns are real – or at least, sincerely held. The British Chambers of Commerce has said, “there would be a reduced hiring appetite were this legislation to come in.” The Federation of Small Businesses reports that two-thirds of members are likely to recruit fewer people because of the Bill. And the Institute of Directors warns it will make hiring “more onerous.”
At the heart of this worry is the introduction of day-one rights to protection from unfair dismissal – a long-overdue reform that employer groups argue will make hiring feel too risky, especially for small firms or for candidates who might be seen as less of a ‘safe bet’ on paper.
But this argument wilfully ignores a basic truth: workers who feel secure at work are more likely to join, stay, and thrive. The trade union movement – from the TUC to Unite and the GMB – is clear that the Bill’s protections will support, not suppress, recruitment.
It’s time we turned the recruitment debate on its head. For too long, the UK’s hiring model has been built on insecurity: zero-hours contracts, bogus self-employment, and disposable labour. The Bill offers a reset. Protections from day one will build trust and stability. Guaranteed rights to request flexible working and to know your hours will help people – especially women, carers, and disabled workers – see employment as sustainable. These are not “costs to business.” They are investments in a workforce more willing and able to work.
Let’s not forget who really pays for bad jobs. It’s not just the workers facing unpredictable shifts and short notice dismissals. It’s also the employers themselves, who deal with constant churn, poor morale, and the costs of re-recruitment. The TUC’s Paul Nowak highlighted at the committee stage of the Bill how some firms with high turnover spend thousands in the recruitment of new staff, whereas the Bill actually incentivises employers to invest in their staff.
Insecure work isn’t flexible – it’s chaotic, and it’s damaging. The Bill’s commitment to improving guaranteed-hours contracts by requiring a stable contract offer after twelve weeks is being painted by some as a blow to business. But it simply means that workers who have shown up week after week will get the certainty they deserve. This is basic fairness. And as the TUC has repeatedly pointed out, the most productive workplaces are those where people feel safe, not disposable.
And we must remember the wider context. The UK has endured fourteen years of wage stagnation, growing in-work poverty, and the steady erosion of employment protections.
The deregulated labour market model has not delivered dynamic growth or stable jobs. It has delivered insecurity and inequality. If the worst practices of employers are allowed to continue, we risk a repeat of the fire-and-rehire practices that allowed P&O to sack 800 workers by video call. We cannot afford to keep giving ground in the name of flexibility.
To prevent such measures, the Bill could go further.
As I argued in the Commons, the government should establish a single legal definition of employment status to stop exploitative employers dodging obligations. And trade unions should be given injunctive powers to prevent mass dismissals before they happen – a necessary balance when employers already have the legal means to stop strikes. But even in its current form, the Bill is a generational opportunity to rebalance power at work.
Critics have also attacked the Bill’s support for collective bargaining – but I have argued it does not go far enough, in terms of delivering true, independent collective bargaining or in reintroducing it to sufficient new sectors of the economy. The OECD and IMF have both concluded that coordinated wage-setting leads to higher productivity and lower inequality.
Their arguments strengthen the case for a renewed culture of workplace democracy, including sectoral agreements that lift standards across the board. Far from scaring off employers, such mechanisms ensure fair competition and stable employment relationships.
The business case against the Employment Rights Bill rests on the flawed idea that workers’ rights and job creation are mutually exclusive. They are not. A fairer workplace is a stronger one. Secure jobs attract committed workers. Respect breeds productivity. And dignity builds a labour market people actually want to enter and stay in.
And as the TUC’s Paul Nowak has said, ‘We hear a lot about the potential cost to employers, the potential impact on recruitment and so on, but some of those points were made during the introduction of the minimum wage.’
We must stop pretending this is a zero-sum game between employers and employees. The Employment Rights Bill deserves not just support, but strengthening. Now is the time for bold action – and to move forward to a more positive future.
Andy McDonald, MP was Shadow Secretary of State for Employment Rights & Protections and was responsible for the publication of Labour’s Green Paper New Deal for Working People. This article first appeared in the GFTU’s Federation News (May 2025)