The British government fudges its employment-rights bill

Britain’s newFSB Labour government came to office pledging the biggest shake-up in in a generation. It also promised to be the most that the country had ever seen. On October 10th, just inside its self-imposed deadline of unveiling legislation within 100 days of taking office, it introduced its employment-rights bill to Parliament. But the contradictions between Labour’s promise to be both pro-worker and pro-business remain. The details of some of the most contentious changes are still uncertain; many will not come into effect until at least 2026.The government’s proposals include a wave of rights for all employees on the first day they are hired, including parental leave and protection from unfair dismissal—the qualifying period for which has fluctuated between six months and two years since it was first introduced in 1971. Changes to statutory sick pay to make it payable immediately would affect more than a quarter of the workforce. A clampdown on “exploitative” zero-hours contracts, affecting 3.4% of the working population and nearly a third of workers in hospitality, is designed to improve conditions for the lowest-paid workers.Some of these measures would bring Britain into line with other countries. Countries such as Germany, Ireland and New Zealand have banned or severely restricted zero-hours contracts, for example. Other proposals go further than many competitor economies. Workers in Ireland have to wait one year to claim protection from unfair dismissal; in Germany and Australia, it is six months (rising to 12 months for small businesses in Australia). Employees in Norway would typically work for four weeks before being eligible for statutory sick pay; in America, businesses aren’t required to offer paid sick leave at all.Many employers are concerned that all this could push up costs and chill hiring. Proposals for expanded trade-union rights, including greater access to workplaces, will worry firms in the technology industry and other areas with historically low union-membership rates. But the biggest hit is likely to be to small businesses grappling with squeezed profit margins. Tina McKenzie, policy chairman at the Federation of Small Businesses (), a trade body, says that such sweeping changes send a “troubling signal to businesses and investors”.Mindful of such voices, the government has made many of its big proposals subject to consultation and secondary legislation. It has said it will consult on a new statutory probation period—its preference is for one of nine months—which would give employers wriggle room to get rid of new hires who are not up to scratch without triggering unfair-dismissal claims. It remains to be decided how companies should determine the number of guaranteed working hours they offer workers who want them. Other ideas, such as the creation of a single employment status, an expansion of pay-gap reporting for large employers to include ethnicity and disability, and the creation of a right to disconnect, have been shunted into the future. “The overarching message is not a lot is going to change very soon,” says Colin Leckey, a partner at Lewis Silkin, a law firm.There is plenty to fix when it comes to Britain’s labour market, most obviously the large number of people no longer looking for a job. A decision to consult on many of the proposed changesis evidence of the government’s pragmatism. But increased regulation is as likely to deter hiring as result in better jobs. And pragmatism can also look an awful lot like uncertainty. The introduction of the employment-rights bill was meant to be a flagship moment for the Labour government. For good and bad, it isn’t that.