Employment Rights Bill could lead to job losses and rise in employment tribunal claims, warns CIPD

The Chartered Institute of Personnel and Development (CIPD) has warned that the Employment Rights Bill could lead to job losses and a rise in employment tribunal claims as employers anticipate increased costs.

A survey of more than 2,000 employers found that 79% expected the bill to raise employment costs, with 30% planning to cut jobs through redundancies or reduced hiring, 23% looking to introduce or expand automation, 22% intending to cut training budgets, 17% reducing staff hours, and 17% increasing the use of temporary workers.

The bill includes changes to unfair dismissal rules, Statutory Sick Pay reforms, and a right to guaranteed hours for zero-hours contract workers.

The CIPD raised concerns about the removal of the unfair dismissal qualifying period and the introduction of a statutory probation period, which it said is the change most likely to result in redundancies.

The Government’s impact assessment estimated a 15% increase in employment tribunal claims due to the bill.

The CIPD also warned that planned changes to trade union recognition rules, which will make it easier for unions to access workplaces, will require greater focus on developing employment relations skills.

It called on the Government to consult meaningfully with employers, provide clear guidance, and develop an implementation plan to prevent unintended consequences, particularly for smaller businesses that may struggle with compliance.

Peter Cheese, chief executive of the CIPD, said: “Our research shows that employers are already starting to seriously think about how the Employment Rights Bill could affect their workforce plans and costs, even without the full detail being clear and it not being implemented for at least another 12 months.