The new amendment to the Employment Rights Bill, including banning the use of non-disclosure agreements (NDAs), will add an additional £80m a year in costs to UK businesses.
According to the employment team at TWM Solicitors, the new clauses introduced in July are expected to increase the existing government forecast of £5bn by at least an additional £80m.
The new additions to the existing legislation would ban NDAs, a proposal rumoured in January, in cases of workplace harassment and discrimination, which is predicted to cost businesses approximately £30m a year.
While extending unpaid bereavement leave to those who lose a pregnancy before 24 weeks could add more than £50m in costs for businesses.
Anthony Wilcox, partner at TWM Solicitors, said: “The costs of the Employment Rights Bill keep mounting. This is already the most expensive and complex piece of employment legislation in a generation.”
“The Bill continues to become more and more complicated, and expensive, and that is unlikely to boost employment across the country,” he added.
Wilcox pointed out that businesses “are rightly very concerned both by the cost of this legislation and the amount of new red tape it will smother them with.”
Employment Bill to pile costs on businesses
The UK government posted its analysis last October, shortly after the announcement of the Bill, which revealed that the measures outlined would cost British businesses around £5bn in additional costs.
The initial legislation included 28 individual measures.
However, over the last 10 months, the Bill has been amended, with the introduction of day one rights and flexible working default delayed until 2027.
The government has faced pushback from businesses due to the costs imposed by this Bill, should it be passed and implemented. There have been concerns raised by lawyers over the knock-on effect the day-one rights will have on the overcrowded Employment Tribunal.
During the days before the Parliamentary recess, the House of Lords voted in favour of a Conservative-led amendment to ‘day-one’ rights provisions, to reduce the length of the qualifying period for unfair dismissal to six months rather than from day one.
Anthony Wilcox noted: “Reducing the period in which employees can make claims for unfair dismissal is potentially going to stop employers hiring staff that they don’t feel 100 per cent comfortable with.”
“The net effect is that businesses will be reluctant to recruit unless satisfied it is necessary to do so, whilst less qualified and inexperienced candidates will find it harder to secure jobs, which is clearly a negative for all involved,” he added.