Manchester, England - As the Employment Rights Bill moves ever closer to becoming law, with the third reading in the House of Lords scheduled for 3 September, a new survey shows how businesses across the country are feeling about the changes. And it’s not good news for the government.
Peninsula, the UK’s largest HR and employment law consultancy, surveyed 577 businesses to find out how they are preparing for the implementation of the Employment Rights Bill and their concerns around the risks posed by the different changes.
The data reveals a promising level of awareness around the Employment Rights Bill, though there's still room for deeper understanding:
- Familiar (54%): Over half of respondents (313 people) say they are familiar with the bill. This suggests that the bill has successfully reached a wide audience.
- Very Familiar (9%): A smaller but significant group (53 people) report being very familiar. .
- Heard of it, unsure of details (33%): A third of respondents (193 people) have some awareness but lack clarity. This signals a need for clearer communication and education around the bill’s provisions and implications.
- Not at all familiar (3%): Only a small fraction (20 people) are completely unfamiliar.
Key Concerns Raised About the Employment Rights Bill
68% of respondents believe that the Employment Rights Bill will have a negative impact on business in the UK, and only 10% believe that the bill will have a positive impact on their business. The changes respondents say will have the most negative impact on businesses are the day one right to claim unfair dismissal (62%), flexible working as the default (47%), and changes to Statutory Sick Pay (SSP) (42%).
71% of businesses surveyed are concerned about higher operating costs, of which 32.7% say they were very concerned and 37.9% somewhat concerned. 66% are concerned about the number of changes and increased administrative burden the Employment Rights Bill will place on them.
What Employers and businesses view as positive
The changes businesses believe will be most positive are enhanced protection against sexual harassment (58%), day one right to paternity leave and unpaid parental leave (31%), and changes to zero-hour contracts (25%)
Concerns by business size
Those with 21–50 employees are the most concerned about the potential impact on hiring, with 68% expressing worries. Among SMEs with 6–20 staff, 57% share that concern, while just over half (52.8%) of micro‑SMEs, businesses with up to five employees — say the same. The data shows smaller firms may have fewer resources to absorb policy changes, making even small shifts feel significant.
Regional Breakdown, Who’s Most Concerned?
Support for the Employment Rights Bill varies across UK regions, but some clear trends stand out. The day-one right to claim unfair dismissal is strongly backed in the West Midlands (68%) and North West (61.2%), showing a widespread desire for better job security. Flexible working also sees solid support, especially in the North West (52.2%) and West Midlands (52%), reflecting changing expectations around work-life balance. In contrast, fire and rehire remains one of the most criticised proposals, with low support in London (9.2%) and high neutrality across regions, suggesting uncertainty and concern. Meanwhile, enhanced protections against sexual harassment receive strong approval in London (69%) and the South East (64%), highlighting a shared commitment to safer workplaces.
Support for employment reforms remains strong across the UK, with the East Midlands showing overwhelming backing for the day-one right to claim unfair dismissal (78.7%) and flexible working as the default (61.7%). The East of England and Yorkshire and the Humber also show solid support for these measures, while Scotland and the North East reveal more mixed views, particularly on zero-hour contracts and fire-and-rehire practices.
Notably, enhanced protections against sexual harassment receive high approval in Scotland (70.4%) and Yorkshire and the Humber (63.4%), reflecting a national push for safer workplaces. However, fire and rehire continues to be divisive, with neutrality and opposition prevalent across most regions.
Industry Most Positive and Negative Breakdown
The most positive change in the Employment Rights Bill is the day-one right to claim unfair dismissal, with strong support in manufacturing (72%), construction (66.7%), and retail (63.8%). Flexible working also stands out, especially in retail (57.4%) and manufacturing (48%), showing growing demand for more adaptable work options.
On the other hand, the most negatively viewed change is fire and rehire, with high criticism in manufacturing (60%) and education (53.3%).
Business Owners More Open to Workplace Policy Changes Than Senior Leaders
The day-one right to claim unfair dismissal stands out as the most supported policy change, with 72.1% of respondents backing it. Flexible working also sees strong approval (59.9%), reflecting a clear shift in workplace expectations. In contrast, fire and rehire is one of the least supported proposals, with only 28.5% in favour. Enhanced protections against sexual harassment, while vital, show lower support (15.7%), suggesting more awareness and education may be needed. Overall, the data highlights which policy changes businesses are ready to embrace—and which ones raise concern.
Employment Services Director at Peninsula
Kate Palmer, Employment Services Director at Peninsula, says, “Clearly businesses are incredibly concerned about the impact the Employment Rights Bill will have. The Chancellor’s hike on employer national insurance contributions (NICs) had a crippling effect on many, with more small businesses closing their doors than ever before. And with increased national minimum wage, the day one right to Statutory Sick Pay and paternity leave, changes to tipping laws and the removal of lower earnings limits to come, this financial pressure is only going to increase.
“Throw in the potential for more tribunal claims, with the costly process of defending your business against claims, and you can see why some are referring to the next few months as the Autumn of Discontent.
“At Peninsula, we’ve seen a marked increase in the number of calls regarding redundancies and hiring confidence has dropped sharply over the last year, with many businesses scaling back operations. A staggering 60% of our survey respondents say they are concerned about the additional risks of hiring new employees once the Employment Rights Bill comes into law, a figure that clearly warns of tough times ahead.
“When you break this down by business size, those with 21-50 employees are most concerned (68%). 57% of SMEs with 6-20 employees were concerned, while 52.8% of micro-SMEs (those with 1-5 employees) expressed concerns.
“The latest employment figures confirm these trends. While wages are growing job vacancies are falling, along with the number of people in payrolled employment.
“In our 2024 end of year Business Confidence Survey, 26% of UK employers said their main goal for the year ahead was survival, up from 19% in 2023. Similarly, only 5% said they were planning to recruit, compared to 22% the year before. These numbers warn of difficult times ahead, especially for small businesses.
“These changes are coming whether businesses like them or not, so preparation is key. Just over half the businesses we surveyed have started to plan for the implementation of the Bill, with only 12% stating that they feel ‘very prepared’. Those without internal HR knowledge should seek advice to ensure they stay ahead of all the incoming changes, keeping policies and processes up to date with all latest legislation and reducing the risk to their business.”
About Peninsula
Peninsula protects employers across the globe with employment law, HR, and health & safety services. From small start-ups to well-known brands, we support tens of thousands of businesses with HR and health & safety. Business owners reduce their legal risk and save time with our expert advice, documentation, and more.
Methodology
The research was conducted by Peninsula. A total of 577 businesses from across England, Scotland, Wales, and Northern Ireland took part. Respondents represented a wide range of industries, business sizes, and regions — from micro‑SMEs with just a handful of staff to larger companies employing over 50 people.
The survey asked employers about:
- Their overall outlook on the Employment Rights Bill
- Which proposed changes they see as most positive or negative
- Concerns around costs, administration, and hiring risks
- Differences in perception by region and business size
Responses were collected in a structured questionnaire format, ensuring consistent data for analysis. Results are presented as percentages of total respondents, highlighting both national trends and regional variations. (survey data)