British business leaders view on the proposed Employment Rights Bill – good or bad for businesses?

On October 10, 2024, the UK government introduced the Employment Rights Bill to Parliament, proposing significant changes to workers' rights, such as altering zero-hours contracts, expanding Statutory Sick Pay (SSP) eligibility, and setting flexible working as a default. This legislation is being presented as a major upgrade for workers, though business leaders have mixed responses on its likely effects. YouGov recently surveyed 1,000 business decision-makers through its B2B Omnibus tool to assess how British businesses perceive the potential impacts of the proposed bill.

Awareness and overall perception of the Employment Rights Bill

According to the survey, 18% of business leaders are well-informed about the bill with those associated with large organisations (250+ employees) more likely to say they know a lot (24%). Some 51% know a little about it, while 21% have heard of it but know no details. This leaves only 9% unaware of the bill, suggesting high general awareness among decision-makers.

When asked about the bill's potential impact on their business, responses varied. Two in five business decision makers anticipate a positive effect, while three in ten (29%) expect a negative impact. Some 23% say it will make no difference.

Zero-hours contracts and staffing challenges

One of the bill’s significant provisions affects zero-hours contracts, requiring companies to offer guaranteed hours to zero-hours workers after a 12-week period if they regularly work consistent hours. Among surveyed businesses, 29% employ zero-hours workers, and for these companies, the new requirement raises some concerns:

• 71% of business decision makers say the changes will increase staffing challenges.
• Only 8% expect these changes to reduce staffing challenges.

Furthermore, many employers are concerned about the financial implications of compensating zero-hours workers for canceled shifts:

• 30% expect costs to increase a lot, 40% expect costs to increase somewhat, and 17% expect them to increase a little.
• Only 10% foresee no increase at all.

Flexible working requirements and operational concerns

The bill also aims to make flexible working the default, granting employees the right to request flexible arrangements from their first day unless employers have legitimate business reasons to deny it. While 27% of businesses feel completely ready for this shift and 43% are somewhat ready, businesses still foresee challenges:

• 41% foresee increased operational costs and reduced productivity.
• 33% anticipate difficulty organizing workloads.
• 29% expect challenges in managing remote workers effectively.
• 24% do not anticipate facing challenges related to flexible working requirements.

Statutory Sick Pay (SSP) adjustments

The Employment Rights Bill proposes removing the waiting period and earnings threshold for Statutory Sick Pay, meaning all employees would be eligible from day one of illness, regardless of income. Business leaders largely support these changes, with 61% expressing support and 34% in opposition. However, they also expect financial implications:

• 18% anticipate a significant financial impact, and 33% expect a moderate one.
• 24% foresee little impact, while 18% say there will be no impact.

Parental and bereavement leave

The bill also seeks to make unpaid parental and bereavement leave available from the first day of employment. Business leaders broadly support this proposal (69% in favor, 23% opposed), although 47% express concerns that these changes may lead to an increase in leave requests.

Restrictions on fire and rehire practices

The bill plans to limit the practice of "fire and rehire," which allows companies to terminate and rehire employees under less favorable terms. Support for this change is high, with 69% of decision-makers in favor and only 21% opposed. However, 48% of business leaders believe restricting fire and rehire could impact their ability to adjust employee conditions, while 42% say it would have no effect on their operational flexibility.

Insights for business leaders

The proposed Employment Rights Bill has generated a range of opinions among UK business decision-makers. While there is support for many of its goals, such as expanded sick pay and flexible working, businesses also anticipate increased costs and operational challenges. Tools like YouGov’s B2B Omnibus allow organizations to gauge industry sentiment and adapt strategies in line with potential policy changes. By leveraging data on business responses to the bill, companies can better prepare for new legal requirements and workforce expectations.

Methodology: YouGov Surveys: Serviced provide quick survey results from nationally representative or targeted audiences in multiple markets. This study was conducted online on 21-29 October 2024 with a nationally representative sample of 1,000 business decision makers in Great Britain (aged 18+ years), using a questionnaire designed by YouGov. The figures have been weighted and are representative of British business size and region.

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