New workers' rights to cost businesses £5bn a year, government says

Published On Oct 21, 2024, 12:34 PM

The UK government's analysis estimates that Labour's proposed upgrades to workers' rights will cost businesses up to £5 billion annually. This cost mainly impacts smaller firms that employ 13 million workers. Although the government acknowledges the costs, they consider this a small fraction (less than 1.5%) of total employment-related expenditures. The proposed changes aim to provide new rights such as sick pay, protection against unfair dismissal, and parental leave from the first day of employment. They also seek to ban zero-hour contracts and enhance trade union rights. While the initial implementation may strain businesses, longer-term benefits include potential savings from reduced lost productivity due to mental health issues and better employee satisfaction. Sectors like hospitality and retail are expected to benefit the most.