Cost of the Employment Rights Act will be higher than £1 billion if got wrong

Responding to the publishing of impact assessments on Employment Rights Act, Neil Carberry, REC Chief Executive, said:

“Any figure on the cost impact of the Act is only an estimate because the real costs will depend on how the Regulations are shaped this year. There is much to do to limit the potential damage the Act might do to employment opportunities. Before Christmas, government took some key steps to make the Act workable. Dropping the day one unfair dismissal proposal was the right call.

“Employers want pragmatism on guaranteed hours powers and on major changes to Statutory Sick Pay. The new SSP rules will cost employers about £1.05 billion a year, up £425 million on the current system, with indirect impacts including £36 million in lost output. Government must ensure that protecting workers does not make it harder for people to find jobs or expose firms to false claims. Our concern is that these measures could deter hiring and investment, hitting productivity and service quality. Got wrong, and the cost to businesses and workers alike would be a lot more than £1 billion.”