An over-correction
The UK’s five biggest business groups have launched a united front against Sir Keir Starmer’s flagship workers’ rights bill – and it’s no surprise. From the CBI to the Federation of Small Businesses, they’re sounding the alarm over what they see as an over-correction: a legislative lurch from flexibility to rigidity, just when businesses are navigating fragile growth, geopolitical shockwaves and rising labour costs.
Let’s be clear: workers deserve better. The UK has lagged behind for too long on issues like job security, zero-hour contracts and union rights. Labour’s employment reforms – including day-one protections from unfair dismissal, a near-ban on fire-and-rehire practices and a move towards guaranteed hours – are rooted in decades of genuine grievances from employees across every sector.
It’s not the intent – it’s the execution
But noble aims alone don’t build resilient economies.
What’s worrying here isn’t the intent – it’s the execution. Dropping day-one dismissal protections into a post-pandemic, post-Brexit economy still adjusting to wage inflation, productivity gap and sluggish investment is a high-stakes gamble. Small businesses, in particular, are already buckling under rising National Insurance and minimum wage pressures. Add more red tape and risk-aversion creeps in. Hiring slows. Innovation stalls. Growth suffers.
Messy realities
Then there’s the fire-and-rehire ban. On paper, it’s a win for fairness. But what’s the alternative when economic circumstances change overnight, and jobs must be restructured to save the rest? These are messy realities no government can legislate away with good intentions and soundbites.
You can’t modernise by reverting back to 1970s unionism
And what about union powers? Yes, collective bargaining plays a vital role in a healthy economy. But weakening accountability mechanisms – while handing unions sweeping new influence – risks reigniting industrial conflict, not collaboration. You don’t foster a modern labour market by returning to a 1970s-style standoff.
The government says this is the biggest upgrade to workers’ rights in a generation. That may be true. But if the costs of implementation drive up unemployment, stall productivity, or push businesses out of the UK altogether, who really wins?
A balance can be struck
There is a middle ground – one where dignity at work coexists with flexibility and growth. That’s where this bill needs to land. The House of Lords must now do what the Commons didn’t: improve, amend and scrutinise with cool heads and real-world perspective.
We can raise the floor for workers without crashing the roof on employers. But right now, Labour’s biggest legacy risks becoming its biggest liability.
