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Labour’s package of workplace reforms will cost UK businesses up to £5bn as companies get to grips with the new rules, the government said in an analysis of its employment rights bill.
The extra costs are expected to be about 0.4 per cent of Britain’s total pay bill of £1.3tn, although certain sectors of the economy will be hit harder.
Most of the costs would represent “a transfer from businesses to their workers”, according to an assessment document released on Monday. “At this stage we believe the direct cost to business would be in the low billions of pounds per year.”
The employment bill is the vehicle for some of Labour’s most contentious policies, designed to boost workers’ rights. They include a ban on ‘exploitative’ zero-hours contracts, day one rights against unfair dismissal and new rights for unions to access workplaces.
The assessment found that much of the almost £5bn bill would be due to “employers familiarising themselves with new legislation, administrative and compliance costs”.
The changes will be more disruptive for companies that rely on flexible contracts in low-paying sectors, according to the assessment. They will be proportionately higher for smaller and micro businesses because of the “fixed costs of admin and compliance burdens”, the government found.
This is a developing story
(Except for the headline, this story has not been edited by PostX News and is published from a syndicated feed.)