Retail group warns Employment Rights Bill could reduce jobs as unemployment climbs

The British Retail Consortium warned that the Employment Rights Bill could yield "fewer jobs, not better ones" as the latest ONS labour-market data show unemployment at 5.1%, a four-month high that underscores the squeeze on employers.

Helen Dickinson, chief executive of the BRC, described the data as alarming and said policy must be built with business to unlock investment, growth and employment. Retail is the UK's largest private-sector employer, providing roughly 3 million jobs — about one in 12 roles — and anchoring high streets across towns and cities nationwide. This backdrop comes as retailers grapple with rising costs and ongoing policy uncertainty that can influence decisions on hiring and investment.

Across the economy, employers are contending with mounting costs and a more complex policy environment. The latest ONS data show retail employment averaged 2.82 million in September 2025, 74,000 lower than a year earlier, and there are now 355,000 fewer retail jobs than a decade ago. Retail operates on exceptionally tight margins and is particularly exposed to cost pressures from policy changes and wage directions. Employers are still absorbing recent increases in employer National Insurance Contributions and the National Living Wage, which have reduced the headroom to hire, invest and grow with confidence.

On the Employment Rights Bill, business groups say the aim to strengthen worker protections and crack down on bad practices is welcome, but warn that elements that reduce flexibility, add complexity or increase costs risk undermining job creation. The Office for Budget Responsibility has warned the bill could have a "negative" impact on employment. For retail, flexibility matters: many roles rely on variable hours, shifts and part-time contracts that help match demand and keep prices affordable for customers. Undermining that flexibility could price people out of work, especially students, working parents and older workers who rely on retail for entry or reentry to the labour market.

A second pillar of the growth debate is skills policy. Retail is evolving rapidly, with expanding demand for digital skills, logistics expertise and strong leadership. Yet the current Apprenticeship Levy remains too rigid to meet those needs. Retailers signaled significant contributions to the levy — about £250 million annually — yet roughly half goes unspent, even as businesses face a clear need to upskill workers for tomorrow’s jobs. Reforming the levy to allow greater flexibility would help retailers and other businesses invest in a broader range of high-quality training, support progression at all stages of a career and boost productivity. That kind of reform would not only benefit workers, but strengthen the wider economy.

The risk, if policies remain misaligned, is that job creation across the economy stalls. The preferable path is a collaborative approach in which government and business work together to unlock investment, employment and growth. Retail, and business more broadly, stands ready to contribute to policy design that supports hiring, training and fair workplaces while keeping costs manageable for consumers.

With the right framework, policymakers can pair protection for workers with operational flexibility, enabling retailers to hire and train people in tune with demand cycles. As the government pursues its growth agenda, industry groups say the goal should be policies that boost investment confidence, strengthen local economies and preserve access to jobs across communities. The journey toward greater prosperity will depend on pragmatic reform that aligns regulatory objectives with the realities of running a modern, customer-focused economy.