Employment Bill returns to Parliament as industry warnings mount

Labour’s Employment (Rights) Bill returns to Parliament next week amid renewed warnings from opposition figures and industry about potential costs to businesses and investment.

Andrew Griffith, the Conservative shadow secretary for business and trade, used a Daily Mail opinion piece on Sunday to urge Prime Minister Keir Starmer to withdraw the legislation, calling it "disastrous" and arguing it would increase burdens on employers, encourage industrial action and deter inward investment. Griffith said Labour had an opportunity to abandon the bill when Deputy Prime Minister Angela Rayner resigned but instead had doubled down and would oppose amendments that, he said, would have eased the impact on firms.

In his commentary, Griffith outlined specific provisions he said would trouble employers, including measures that would make it harder to dismiss poorly performing new staff, require pay for cancelled shifts even when employers give notice and guard against last-minute cancellations, and tighten rules around industrial action ballots. He said those changes, if enacted, would raise costs for both large firms and small employers and increase the risk of strikes.

Griffith also linked recent transport disruption in London to broader concerns about union power under the proposed law, citing this week's Tube strikes and saying they illustrated the potential for more frequent industrial action. He pointed to what he described as a trend of firms reassessing UK investments, saying US pharmaceutical company Merck had scrapped a planned £1 billion investment because it no longer considered the UK competitive.

The assertions in the opinion piece were presented as part of a political critique; industry responses and government statements were not included in the piece. Griffith characterised the bill as part of a package of Labour policies, including a rise in employer National Insurance introduced in 2024, that he said were harming the business environment and increasing borrowing.

The Employment Bill has been subject to amendments in the House of Lords. Griffith said Labour planned to vote down cross-party changes that he and others argued would have reduced burdens on employers. Supporters of the bill, including many in Labour ranks, have said the legislation is intended to strengthen workers' rights and update employment protections, though those arguments were not laid out in Griffith's piece.

Business groups have previously expressed concerns about parts of the bill, citing potential costs and administrative complexity. The government has defended its proposals as measures to improve job security and workplace fairness. The bill’s return to the Commons will set the stage for further debate and votes on any remaining amendments.

The timing comes amid wider political debate over the economic outlook. Opposition politicians have used recent strikes and investment decisions to argue that the government’s approach is damaging competitiveness and that future tax rises or borrowing could impose additional costs on households and firms. The government has argued its policies balance workers’ protections with the need for a competitive business environment.

Parliamentary consideration next week will determine whether Labour can maintain its current position on the bill or whether further concessions will be required. Lawmakers and business groups will be watching for how votes unfold and for any new analysis of the bill’s economic impact that may inform the debates.