Workers Say It’s About Time Someone Protected Them
Why Employers Fear The Employment Rights Bill
The Employment Rights Bill is being touted as a breakthrough to a fairer, more inclusive workplace, especially for carers, gig economy workers, and zero-hours contract workers. But many UK businesses are hitting the brakes on hiring, worried that the bill may have unforeseen costs (AP News, 2024).
A recent Institute of Directors (IoD) survey found that more than half of employers say the bill makes them less likely to hire new staff. For them, it's not just politics, it's legal risk, higher costs, and administrative headaches (Institute of Directors, 2024).
The Root of the Fear: Greater Legal Exposure
Employers are concerned that the bill could result in an increased risk of being taken to an employment tribunal, a process that is both time-consuming and expensive (Yahoo Finance, 2025).
The bill extends protection for workers, including:
Day-one rights to request flexible working
Extended unfair dismissal protection
New rights for carers and vulnerable contract workers (The Guardian, 2024)
With more legal rights, staff will have more grounds and more incentive to sue their employer. The more extensive and complicated the laws, the more likely employers will fall foul, especially on procedural errors, like failing to conduct a flexible working request or dismissal procedure properly (Eversheds Sutherland, 2024).
Employment tribunals have the potential to award high sums, particularly for discrimination or unfair dismissal. The wider the variety of rights, the greater the financial exposure per claim (Yahoo Finance, 2025).
Even when claims are not won, they are costly to defend. There is a concern among some employers that the bill will create a more litigious culture, increasing the volume of claims overall (Institute of Directors, 2024).
The Institute of Directors is not alone. Large business groups recently wrote to members of the House of Lords warning them that the bill could be "deeply damaging" to UK competitiveness (Institute of Directors, 2024).
More than a third of employers say they'll consider outsourcing work abroad, and over half are considering automating jobs rather than taking on new staff (Yahoo Finance, 2025).
The Employment Rights Minister dismisses these worries as hype, likening them to early employer resistance to the minimum wage—resistance that history has shown was unfounded (Yahoo Finance, 2025).
He cites a University of Cambridge study showing the bill could boost recruitment and retention in the longer term (AP News, 2024).
Business worries are centred around the idea that employers will opt to halt hiring, invest in automation, or outsource overseas rather than take on the uncertainty of the bill (The Guardian, 2024).
Something clear is that the bill intends to increase fairness, flexibility, and retention, which can only be a good thing.
References
AP News. (2024, October 10). UK's new Labour government unveils overhaul of workers' rights. https://apnews.com/article/britain-workers-right-fa443999aaf9336c8858bf6d669a0499
Eversheds Sutherland. (2024, October). Contractual change reforms including 'fire and rehire'. https://www.eversheds-sutherland.com/en/united-kingdom/insights/contractual-change-reforms-including-fire-and-rehire
Institute of Directors. (2024, October). Majority of businesses likely to reduce hiring as a result of Employment Rights Bill. https://www.iod.com/news/employment-and-skills/iod-press-release-majority-of-businesses-likely-to-reduce-hiring-as-a-result-of-employment-rights-reforms/
The Guardian. (2024, October 10). New enforcement agency will protect workers’ rights as part of 'watershed' bill. https://www.theguardian.com/politics/2024/oct/10/new-enforcement-agency-will-protect-workers-rights-as-part-of-watershed-bill?utm_source=chatgpt.com
Yahoo Finance. (2025, June 10). Employment Rights Minister denies bill will cause legal chaos. https://uk.finance.yahoo.com/news/employment-rights-minister-denies-bill-161706055.html