Angela Rayner’s claim that new employment rights will boost growth have been seriously challenged after details of the new bill were published yesterday.

The Deputy Prime Minister insisted that the economy had been left in a “really difficult position” because of insecure work and low pay.

Creating pay and job security would filter through the economy by increasing spending and confidence, she said. About 200 amendments have been tabled by the government which says the bill will strengthen rights over unfair dismissal, sick pay, parental benefits, trade union recognition and zero hours contracts.

Business leaders said the changes largely ignored their key concerns and that they would add to the higher costs being imposed by the Chancellor.

Recruitment and Employment Confederation (REC) chief executive Neil Carberry said: “Government says it is pro-business and targeting growth. Yet there are still clauses in the Bill that could put opportunities at risk for workers and further raise the costs for employers when taking a chance on people.

“Many of our members and their clients will find it difficult to reconcile that these announcements are unequivocally pro-business and pro-worker if the detailed regulations to come don’t consider the costs to business from overly complex bureaucracy, and a lack of choice on how to employ agency workers who already have employment protections.

Rain Newton-Smith, chief executive of the CBI, said: “There is no getting away from the fact that this bill will hinder the efforts of business to play their part in turning that mission into reality, at a time when many are continuing to struggle with the increasing cost of doing business.”

She added: “The government has been commendably open to seeking feedback from industry about these plans. But businesses will remain deeply concerned that this willingness to engage has not translated into meaningful change to address several key areas where the legislation locks in an irreversible direction of travel.”

Craig Beaumont, executive director for the Federation of Small Business (FSB) added: “The announcements today undermine the government’s own push for growth. Ministers are now starting to run out of time to fix the bill, and show they have the back of one million small business employers.”

Professor Len Shackleton, editorial and research fellow at the free market think tank the Institute of Economic Affairs, said: “The Government’s Employment Rights Bill may be well-intentioned, but it risks damaging businesses which are already under pressure and stifling economic growth, whilst hurting the very workers the bill intends to protect. Today’s amendments do not alter this.”

The GMB union’s general secretary Gary Smith said the bill was “far from perfect” but a “massive step forward”.

UK Business Secretary Jonathan Reynolds defended the measures, saying: “Many businesses already have worker friendly practices in place and can attest to the positive impact they have on retention, productivity and job satisfaction.

“We want to go further and untap the UK’s full potential by attracting the best talent and giving business the confidence to hire to help the economy grow.”

See also:

Interview: Neil Carberry

Beware of new rules on redundancy