Plea to Starmer over ‘devastating' cost of employment rights bill

Times

05-06-2025

Businesses keeping Britain's hospitals, train stations, airports, offices, warehouses and factories clean, maintained and secure have warned the prime minister of the 'devastating impact' of the government's employment rights bill.
In an open letter to Sir Keir Starmer, his deputy Angela Rayner and the business secretary Jonathan Reynolds, the 128 companies — including the sector leaders OCS Group, Churchill Group and Mitie — urged the government to rethink its plans.
The letter highlighted what its authors believe will be the 'serious unintended consequences' from the large-scale changes to employment law proposed by the legislation, which is passing through parliament. The reforms include making protection from unfair dismissal a right from the first day of employment, increased union representation and more generous sick pay, which has to be paid for by businesses.
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'We are deeply concerned that some of the bill's provisions … could harm both good employers and the very employees that the bill seeks to protect,' the authors of the letter say.
The additional costs or risks of hiring the wrong person for a role would 'force some employers to reduce staff headcount or reduce their hours, turn down new contracts, or even exit the market altogether,' they added.
Dominic Ponniah, chief executive of the office and commercial cleaning company Cleanology and a co-author of the letter, said concerns had been building about the negative impact of the legislation for some months, but they had come to a head once facilities management firms had seen the impact on their operating costs of April's rise in employers' national insurance to 15 per cent.
'Suddenly people are feeling that on their bottom lines and we need to make our voice heard,' he said.
The 128 signatories of the letter also include Josie Marshall-Deane, regional director of OCS Group, whose services include passenger screening, surveillance and emergency response at airports, and Charlotte Parr, executive director of Churchill Group, which is majority-owned by 10,000 of its employees and works to maintain social housing for housing associations, among other services.
The facilities management industry overall employs 1.4 million people and generates £60 billion for the economy, making it many times more important for economic growth than other more favoured industries such as fashion and farming, the authors note. It is dominated by thousands of small and medium-sized companies, typically operating on tight profit margins. They said the changes to employment law 'risk penalising the good companies while doing little to deter the bad players'.
The companies make clear their support for the government's efforts to tackle exploitative labour practices and establish fair treatment of agency workers.
The government is phasing in the introduction of the new rights, which it has calculated could add £5 billion in costs to the economy each year. Smaller companies will be hit disproportionately, it acknowledges. It has said most of the new rules would not take effect until next year.
A Government spokesperson said: 'Insecurity and poor health at work aren't just bad for workers, they also impact productivity and drive down competitiveness in businesses and the wider economy.
'That's why through our transformative plan for change, this government is delivering the biggest upgrade to workers' rights in a generation, and our measures already have strong support amongst business and the public.
'We've consulted extensively with business on our proposals, and we will engage on the implementation of legislation to ensure it works for employers and puts money back into the pockets of working people.'