Labour is frustrating business by failing to get to grips with concerns about its workers’ rights plans, the Confederation of British Industry (CBI) has warned.
The group said it would like to have seen ‘more engagement’ from the Government over the policy which threatens to add billions to costs at a time when many are already struggling.
Ministers have said they will take on board bosses’ concerns over the legislation, which will grant ‘day one’ rights to workers and pile on reams of red tape.
CBI chief economist Louise Hellem told the Daily Mail: ‘We have always been very ready to engage and we feel that the options we’ve put forward are very practical. But we have been slightly frustrated by the process and we would have liked to see more engagement on this just because it is such a huge concern for businesses.
Warning: Labour is frustrating business by failing to get to grips with concerns about its workers’ rights plans, according to the Confederation of British Industry
‘And it’s coming on top of increased costs for employing people like National Insurance contributions.’ Added to that were steep rises in the minimum wage, she said, adding: ‘All of those things are making it more difficult to employ people in the UK – at the same time the Government is concerned about rising youth unemployment, concerned about rising inactivity.’
The Government’s own analysis suggests that its workers’ rights package will cost up to £5billion a year to implement. And in a recent briefing to MPs, the CBI said the reforms ‘will backfire with significant unintended consequences for growth’.
It added: ‘Sticking to the Government’s current path will damage investment and mean fewer jobs, lower wages, employment tribunals collapsing under the weight of new claims, and less money available for public services and welfare without tax rises on working people.’
A key area is the Government’s plan to introduce a day one right to protection from unfair dismissal. Currently, employees only gain this right after two years.
Opponents argue that while it may be fair to reduce the qualifying period from two years, the ‘day one’ rule will deter employers from taking a chance on some employees.
The CBI has said it would ‘discourage businesses of all sizes from hiring someone without a perfect CV, such as young people without experience or those with a recent history of inactivity’.
Its latest comments about the plans come as the Tony Blair Institute – the former prime minister’s think-tank – also intervened to warn that they risk holding back the UK’s flexible labour market, ‘eroding business confidence to hire and ultimately undermining growth’.
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