TUC – impact assessment shows Employment Rights Bill will benefit workers, business, and the economy

  • Impact assessment says ten million workers will benefit from overhaul of workers’ rights – with a “significant positive impact’ for workers in low-paid, insecure work
  • Rigorous impact assessment shows costs to business are more than offset by substantial wider economic and social gains
  • Reforms will help more people stay in work, boost living standards and improve health and wellbeing

An impact assessment published today (Monday) by the Department for Business and Trade confirms that that government’s Employment Rights Bill will bring real and substantial benefits to workers, business, and the wider economy.

Impact on workers

The impact assessment sets out that ten million working people across the country will directly benefit from the overhaul of workers’ rights. Their jobs will become more secure, the quality of their work will improve and they will directly gain as their incomes rise.

The package is “expected to benefit people in work with the protected characteristics that are disproportionately represented in low pay, low quality, unsecure jobs”. These include low-paid women, younger workers, ethnic minority workers and disabled workers.

The impact assessment shows that the impacts of the Employment Rights Bill will result in direct financial gains for low-paid and insecure workers.

Impact on economy

The impact assessment sets out the positive economic impacts the package will deliver, recognising it will be “significantly positive for society” and that it is likely to have net positive impacts for growth.

The analysis suggests these include improved workforce health and wellbeing; increased economic activity rates; improving equality; improved industrial relations; and higher productivity.

It says “workers who feel more confident in their finances due to better income security may spend more” which would be good for local economies.

These benefits will support the government’s Mission for Growth” helping to “raise living standards across the country and create opportunities for all.”

Impact on business

The impact assessment states costs to business will represent just under 0.4% of total employment costs across the economy, which are more than offset by substantial wider economic and social gains.

The majority of this will be transferred directly into the pockets of workers – helping raise living standards and give people more money to spend.

The impact assessment says there will be further benefits to employers from “improved wellbeing and health” with 17.1 million working days lost due to stress, depression or anxiety in 2022/23 – the equivalent to over £5 billion of lost output.

And businesses will also benefit from the bill tackling the undercutting that good employers currently face when trying to do the right thing.

TUC General Secretary Paul Nowak said:

“This impact assessment confirms that the Employment Rights Bill is good for workers, good for business and good for the wider economy.

“Driving up employment standards will boost living standards, productivity, and growth. That’s why the vast majority of managers support these plans.

“Most employers in this country treat their staff well and do not use exploitative practices like zero-hours contracts and fire and rehire.

“By levelling the playing field on workers’ rights and protections this bill will give people more predictability and control over their lives. And it will stop decent firms from being undercut by the bad.

“These reforms will improve the health of our workforce, bring real economic gains and ensure working people share fairly in the gains of growth.”

Commenting on the impacts for business, Paul added:

“Despite repeated attempts to paint this bill as bad for business, this rigorous impact assessment shows that the business costs are negligible and are more than offset by the wider economic and social gains.

“These changes will mostly affect those companies whose business models have been built on low-paid, insecure employment.

“Decent employers will welcome these measures and the improvements they will bring for their businesses and workforces.”

Polling published in September revealed that a clear majority of small, medium, and large employers support the government’s plans:

  • Retention: Seven in 10 (74 per cent) believe that strengthening employment rights will improve workforce retention, compared to just 6 per cent who do not.
  • Productivity: Seven in 10 (73 per cent) say strengthened employment rights will boost productivity, compared to just 7 per cent who disagree.
  • Profitability: Six in 10 (61 per cent) think stronger employment rights will have a positive impact on business profitability, compared to fewer than two in 10 (17 per cent) who disagree.
  • Job security: Six in 10 (60 per cent) said that employees should have more security at work, compared to just 3 per cent who think they should have less.
  • Workforce health: Seven in 10 (75 per cent) think that strengthened employment rights will improve employee health, compared to just 4 per cent who disagree.