Over 100 companies sign scathing letter as Conservatives brand Deputy PM’s plans ‘unemployment bill’
British businesses have launched a co-ordinated assault on Angela Rayner’s “deeply damaging” employment laws, with industry leaders warning the Deputy Prime Minister’s radical reforms will suffocate firms and destroy jobs across the country.
More than 100 companies have signed an explosive open letter attacking the Employment Rights Bill, while Conservative critics have branded it the “unemployment bill” – claiming it will deter businesses from hiring staff and wreak havoc on Britain’s already fragile economy.
The revolt comes as Ms Rayner faces the embarrassing spectacle of her own civil servants voting to strike over working conditions – even as she pushes through laws that would hand unions unprecedented powers.
‘Wrecking Ball to the Economy’
In a scathing attack on the legislation, business leaders have accused the Deputy PM of taking a “wrecking ball to the economy” with reforms they say will strangle growth and push firms to the brink.
The Employment Rights Bill – which has just passed its third reading in the Commons and is heading to the Lords – would introduce sweeping changes including:
- Day-one rights to claim unfair dismissal
- Banning “exploitative” zero-hours contracts
- Giving workers immediate access to sick pay
- Massively expanding union powers
- Introducing day-one rights to parental leave
- Restricting “fire and rehire” practices
Conservative peer Lord Hunt of Wirral didn’t mince words in the House of Lords, declaring: “If it passes in anything like its current form it could be more appropriate to call it an unemployment bill.”
Business Bosses Unite in Fury
In an unprecedented show of unity, over 128 companies representing £7 billion in UK GDP and employing more than 156,000 people have signed a damning open letter to the Prime Minister, Deputy PM and Business Secretary.
The letter, co-authored by Cleanology CEO Dominic Ponniah and Think FM managing director Malcolm Hills, warns of “grave unintended consequences” that could devastate British industry.
“Introducing day-one unfair dismissal rights will increase the legal and financial risk of taking on new hires and discourage employers from offering opportunities to individuals who need a first step, a second chance, or time to prove themselves,” the letter states.
It adds that the changes will “discourage growth and reduce employment opportunities — especially in labour-intensive sectors like ours.”
‘Sleepwalked Into Disaster’
The Confederation of British Industry (CBI) has drafted its own letter to the House of Lords warning that giving employees the right to claim unfair dismissal from day one would leave businesses “hamstrung.
The draft letter chastises the government for going “far beyond the outcomes outlined in the Labour manifesto” and warns of “grave unintended consequences” at a time when the Prime Minister is under pressure to boost living standards.
Business groups are calling on the Lords to “fully scrutinise and improve this legislation in order to find a landing zone that is genuinely both pro-worker and pro-business.”
Federation Fights Back
Craig Beaumont, the Federation of Small Business’s executive director, pulled no punches in his assessment: “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.”
The Office for Budget Responsibility (OBR) has acknowledged that the Bill is likely to have a “net negative” impact on the economy – a devastating blow to Labour’s claims it will boost productivity.
Business groups including UKHospitality and the Federation of Small Businesses have called on Ms Rayner to delay her employment rights reforms in light of the OBR’s warning.
Union Power Grab
Critics say the Bill amounts to a massive power grab by unions, who would gain:
- Twice as long to call strikes after a ballot
- The ability to trigger walkouts with a simple majority
- Automatic funding from members unless they opt out in writing
- No longer needing to check with members every 10 years about political donations
The Bill would also establish a new Fair Work Agency with powers to enforce employee rights and fine businesses for breaches.
Rayner’s Own Staff in Revolt
In a delicious irony, Angela Rayner’s own civil servants have voted to strike – just as she prepares to hand unions even more power.
Workers in her Ministry of Housing, Communities and Local Government are furious over “rigid” back-to-the-office demands and plans to shut key regional offices.
PCS union boss Fran Heathcote fumed: “As the main face of the Employment Rights Bill, the Deputy Prime Minister must match her words with action and listen to her own workers.
‘Banter Bouncers’ Warning
The Equality and Human Rights Commission (EHRC) has warned that new rules requiring companies to prevent harassment of staff by third parties – including customers – are too broad and could lead to “excessive limitations on debate.
Lord Young of Acton, who co-founded the Free Speech Union, asked: “How will publicans be expected to protect their employees from overhearing conversations in pubs by customers that they may find offensive or upsetting?
He warned that suggestions pubs might need to employ “banter bouncers” to protect staff showed how absurd the legislation had become.
What Businesses Say
The open letter from facilities management firms doesn’t mince words about the devastating impact:
“Recent increases to employer National Insurance contributions have already placed a heavy financial strain on service-based industries like ours, despite warnings from the business community which have been largely ignored.”
At a time when inflation and operating costs are rising, this additional burden risks forcing employers to scale back hiring, reduce hours, or cut back on training and development opportunities for staff.
Government Defiant
Despite the mounting criticism, the government remains defiant. A spokesman said: “Through our transformative Plan for Change, this Government has delivered the biggest upgrade to workers’ rights in a generation, and our measures already have strong support amongst business and the public.”
But with businesses warning of economic disaster, her own staff in revolt, and critics branding it the “unemployment bill,” Angela Rayner’s flagship legislation faces a rocky road ahead.
As one business leader put it: “We’re being sleepwalked into disaster – and someone needs to wake up before it’s too late.”
Title: The Deputy Prime Minister Angela Rayner chairs the first Make Work Pay meeting
Author: Unknown / Cabinet Office (UK Government)
Date & Location: 8 October 2024, Cabinet Office, Westminster, London
License: Listed on Commons—typically CC BY 4.0 or similar; please verify the exact license on the image’s page for your intended use
Original Commons page: File:The Deputy Prime Minister Angela Rayner chairs the first Make Work Pay meeting (53921886542).jpg
