With a painful budget just a week away and insolvencies still at record highs will businesses be able to cope with the new laws on protecting workers?
The bill, which passed into law this week includes new rights related to sick pay, flexible working, and paternity leave.
It would guarantee new rights for workers from the first day of their employment including: sick pay, protection from unfair dismissal, parental and bereavement leave.
According to the Government’s own analysis it will add up to £5bn a year to business costs, with costs disproportionately affecting small businesses.
The FSB (Federation of Small Businesses) has warned that the Government underestimates the real costs this legislation could have on growth and participation.
A poll of over 500 SME leaders for specialist lender Simply Asset Finance saw 74% say the Budget will have a direct impact their future growth plans. While a third highlighted action against rising energy costs as a priority, 27% flagged concern around tax incentives for innovation.
Not surprisingly the TUC says the business costs are “negligible”.
Paul Nowak, general secretary of the TUC, said: “Decent employers will welcome these measures and the improvements they will bring for their businesses and workforces.”
Quoting Health and Safety Executive figures, the Government report says depression, stress and anxiety led to 17 million working days being lost last year, costing the economy £5.2 billion in lost output.
Around two million workers were set to benefit from the reforms, the report said, including a £400m a year increase in sick pay due to reforms to Statutory Sick Pay.
While inevitably there will be some initial pain taking into account all the other expected measures in the budget it remains to be seen whether greater protection for workers will cause business problems in the medium to longer term.