The Employment Rights Bill has now passed its House of Commons stages and is headed for the House of Lords. It has roughly doubled in size since it was first introduced in October 2024. Most of the amendments made are technical – they take up a lot of pages but they don’t do anything interesting. Some, however, make significant changes to the way in which the Bill’s provisions will operate and I will be writing more about those in the weeks ahead. 

The Bill is, I think, the biggest single piece of new employment law legislation we have ever seen. Excluding consolidation measures like the Employment Rights Act 1996 we have never seen a single piece of legislation attempt to do so much in the field of employment law. Neither the Industrial Relations Act 1971 or the Employment Protection Act 1975 come close in my view. New Labour’s Employment Relations Act 1999 is just not in the same league. The 2025 Act will be in a class of its own. 

Reading the House of Commons debates at Report Stage and Third Reading one argument that really struck me was concerned with how much employers support the Bill. This seemed to really matter to MPs. Essentially the Conservative argument was that this Bill is opposed by employers because it will expose them to more costs and restrictions that will inhibit growth.  Labour’s argument was that good employers should welcome the Bill because they are already doing the things that the Bill requires. Andy MacNae the Labour MP for Rossendale and Darwen said:

“Up until now, good employers have always felt the risk of being undercut by unscrupulous and short-term disruptors looking to make a quick buck. This is a real and serious issue—I have experienced it in business, and many other business owners have raised it with me. Businesses doing the right thing should not be disadvantaged, yet weak and outdated employment legislation has left them exposed. This Bill levels the playing field. Good employers can keep on doing what they do, knowing that their competitors can no longer undercut them by, for instance, employing a majority of their staff on zero-hours contracts, not giving holiday pay, firing and rehiring or just underpaying.” (Hansard, 12 March 2025, col 1142)

This is essentially the same argument that I remember being played out in the New Labour days of the late 90s. Keeping the CBI and the employer’s lobby broadly on side was a key priority and there was essentially an unwritten deal. The Government would consult the business lobby and take their specific objections to new legislation seriously. In return businesses would not throw their toys out of the pram and would make broadly sympathetic noises about the aims of the Bill and the importance of acting reasonably and working in partnership with trade unions (social partnership was all the rage in the late 90s).  A similar process seems to be at work with the Employment Rights Bill today.

It’s all very well – but I don’t really buy it. Employers aren’t supposed to like employment law. It isn’t really meant to help them. If we scrapped the law of unfair dismissal altogether, would the business community really object to that? Would the ‘good’ employers really feel they were being undercut by the ‘bad’ employers who sacked their staff without good reason? Perhaps. But I think most would welcome the freedom that not having to worry about tribunal claims would bring. After all, they could still behave as reasonably as ever and attract and retain talented employees who appreciated the security of working for an employer that would not dismiss them on a whim. 

I just don’t find the ‘undercutting’ argument all that compelling. If we are concerned about a level playing field then the real issue is the number of employers who feel able to ignore legal requirements that are already in place because the Employment Tribunal system is stretched to breaking point. Creating new rights for workers is all well and good but if it takes two years to get to a hearing those rights are not worth much. Those employers who do their best to comply (and I think that is most of them) are likely to feel resentful when they see that other employers can get away with flouting the law because there is no effective way for workers to enforce it. The Employment Rights Bill does try to address enforcement issues – and gives the Secretary of State some interesting new powers. But it remains to be seen whether these will be backed up by the resources needed to make them effective. 

Employment law – when it works – is essentially a restriction placed on managerial discretion. It limits what an employer is allowed to do in terms of recruitment, dismissal and the way in which it treats and rewards its workforce. Good employers would indeed say that they would never want to discriminate or behave unreasonably, but they would have to be positively saintly to welcome the scrutiny of employment tribunals

And even if employers were happy for there to be some basic level of legal protection for employees they could not possibly be happy with the sheer volume and detail of UK employment law. It is at the very best an inconvenience to them. And I positively refuse to believe that any employer will read the new provisions on guaranteed hours inserted by Clause 1 of the Employment Rights Bill and rejoice at the Government’s approach. That would be downright perverse.

None of this is an argument against employment law. I am very much in favour of it and think that in many areas it should go further than it does. Employment law is about balancing the competing rights and interests of employers and employees. But its starting point is the massive inequality of bargaining power between an employer and an individual employee – and that means that balancing the scales involves giving employees rights and placing restrictions on employers. As a result any individual measure will seem one-sided and it is asking too much of employers – even the ‘good’ ones – to expect them to welcome it. The real question is whether the benefits conferred on employees justify the corresponding burden placed on employers. The extent to which the Employment Rights Bill passes that test is something that I think I am going to be talking about a lot over the next four years.