Retail groups warn Employment Rights Bill could reduce jobs, not improve them

A leading industry group warned that the Government's Employment Rights Bill could undermine job creation, concluding that some provisions would lead to fewer jobs rather than better ones. The British Retail Consortium said the measure—along with a challenging policy environment—could raise costs and reduce flexibility at a time when unemployment has risen to 5.1%, a four‑month high according to the latest Office for National Statistics data. Helen Dickinson, the BRC’s chief executive, urged policymakers to co‑design rules with business so they can unlock investment, boost employment and drive growth rather than impose constraints that hinder hiring.

Retail remains the United Kingdom’s largest private sector employer, anchoring high streets and communities across the country. About one in twelve jobs are in retail, totaling almost three million workers. The ONS data show retail employment averaged 2.82 million in the four‑quarter period ending September 2025, down 74,000 from a year earlier, a decline that continues a longer‑running trend. In total, there are 355,000 fewer retail jobs today than a decade ago, underscoring a shift in the sector’s size and the opportunities it offers local communities. Retail has long provided accessible employment and a path into the workforce for millions, including first jobs, flexible hours and roles that can adapt to life circumstances. Rising costs—especially the recent increases in employer National Insurance Contributions and the National Living Wage—have squeezed margins and reduced the headroom to hire, invest and grow with confidence. Higher costs are felt quickly in hiring decisions, hours offered and investment plans, and over time this translates into fewer jobs and weaker high streets, particularly in towns where retail remains a significant local employer.

Dickinson acknowledged that the Employment Rights Bill contains provisions designed to strengthen worker protections and crack down on bad employment practices. However, she warned that parts of the bill that reduce flexibility, add complexity or increase costs without reflecting how businesses actually operate could have unintended consequences. The Office for Budget Responsibility has warned that the bill could have a negative impact on employment if it raises compliance costs or slows hiring in practice. In retail, where contracts range from full‑time store roles to flexible or seasonal arrangements, maintaining adaptable employment practices is viewed as essential to meeting fluctuating customer demand.

Beyond rights protections, skills policy is a critical piece of the growth equation. The sector is evolving to meet demand for digital capabilities, logistics expertise and strong leadership, yet the current Apprenticeship Levy remains too rigid to fit those needs. Retailers together contribute about £250 million each year, but roughly half of that levy goes unspent, as businesses struggle to translate levy payments into training that aligns with tomorrow’s jobs. Reforming the levy to permit greater flexibility would help retailers—and businesses more broadly—invest in a broader range of high‑quality training, support progression at all career stages and boost productivity. Such reform would not only benefit workers but also strengthen the wider economy.

The risk now is that poorly aligned policies undermine job creation across the economy. Yet there is a better option: with the right approach, government and business can work together to unlock investment, employment and growth. Retail—and business more widely—stand ready to play their part, partnering with government to deliver the growth the UK urgently needs. As the sector adapts to a changing consumer and policy landscape, policymakers are urged to design rules with practicality in mind, ensuring protections for workers while preserving the flexibility that supports hiring and training.

Retail leaders emphasize that partnership is essential to a resilient economic path. They argue that a balanced set of reforms—targeted protections for workers, a more flexible levy, and policy crafted in consultation with business—can unlock investment, sustain employment and strengthen communities. The message is clear: growth benefits both workers and the broader economy when policy aligns with the realities of hiring, training and adapting to a rapidly evolving retail landscape. In that frame, government and business must collaborate to deliver a pragmatic, evidence‑based plan for the UK’s post‑pandemic growth trajectory. The industry notes a need to protect workers while enabling firms to hire, train and respond to shifting demand as the country seeks to rebuild and modernize its high streets.