Alarm at Labour's 'WFH charter for idlers': Businesses and Tories warn workers' rights overhaul risks lower productivity and mass job losses with firms going bust due to 'red tape'
Labour was accused of planning a 'WFH charter for idlers' today in the wake of the King's Speech.
Keir Starmer has been warned the radical overhaul of employment rights featured in his first legislative package risks mass job losses and firms going bust.
The French-style laws, championed by deputy PM Angela Rayner, would give employees a string of rights from their first day in the job.
They include the right to flexible working by 'default', access to sick pay and paternity leave and protection from unfair dismissal.
Zero-hours contracts will be banned where they are 'exploitative' and employers will be forced to pay a higher minimum wage to younger workers.
Unions were also gleeful that the so-called 'Red Revolution' will ditch a string of anti-strike laws and removed 'unnecessary restrictions on trade union activity'.
Keir Starmer (pictured in Oxfordshire today) has been warned the radical overhaul of employment rights featured in his first legislative package risks mass job losses and firms going bust
The King's Speech included a vow to give employees a 'default' right to flexible working from 'day one', as well as immediate access to sickness and parental leave
Labour's 'New Deal for Workers' was being championed by Deputy PM Angela Rayner (pictured yesterday), but has seemingly now been given to Business Secretary Jonathan Reynolds
Responding to the King's Speech yesterday, Rishi Sunak told MPs: 'In this country, our employment rate is far lower than the European average and that is thanks, in part, to our flexible labour market'
New equality laws will force firms to provide the Government with an annual audit of how much ethnic minority and disabled workers are paid.
However, businesses and employment lawyers predicted that companies would hold off recruiting, and could even sack a swathe of shorter-serving personnel just before the measures take effect.
Shadow business secretary Kevin Hollinrake told MailOnline the proposals would mean 'business closures and job losses'.
'Making flexible working the default and requiring employers to accommodate it is a ''work from home'' charter but also, and very significantly, it switches the decision on how and where people work from the employer to the worker,' he said.
'More red tape from a classic socialist, big state government, which will stifle economic growth and lead to business closures and job losses.'
Former Cabinet minister Jacob Rees-Mogg said: 'The UK has had a productivity problem for 30 years made worse by the move to working from home.
'Employers will not risk creating new jobs if Labour creates an idlers' charter which will reduce opportunities for all workers.'
Tom Clougherty, director of the Institute of Economic Affairs, said the 'stack of new regulations on the labour market will reduce flexibility and increase structural unemployment'.
In his response to the King's Speech yesterday, opposition leader Rishi Sunak told MPs: 'In this country, our employment rate is far lower than the European average and that is thanks, in part, to our flexible labour market.
'I would urge the party opposite not to impose new burdens on businesses that business leaders themselves have warned of the unintended consequences of those plans.
'That they could lead to firms being less likely to invest, less likely to hire and so increasing unemployment in the long term.'
Labour's 'New Deal for Workers' was being headed up by Ms Rayner in opposition, but has seemingly now been given to Business Secretary Jonathan Reynolds.
The Government said the measures represent the biggest upgrade to workers' rights in a generation, stressing that ministers will work with unions and business to finalise details.
Flexible working is being made the 'default', although there is a caveat that this is only 'as far as is reasonable'.
The Tory government's reforms of union powers, including minimum service levels in areas like rail, will be abolished.
The process of getting recognition for unions in workplaces will also be 'simplified', although there are few details.
Under the new Bill, a Fair Work Agency will be established to strengthen enforcement of workers' rights.
There will also be a new fair pay agreement in the adult social care sector to establish national terms and conditions and fair pay rates, as well as a 'genuine' national living wage which removes 'discriminatory' age bands.
Stephen Montgomery, chairman of The Scottish Hospitality Group told MailOnline: 'Work from home does not help hospitality. We are trying to encourage people back to the workplace and back to offices.
'Of course there are certain circumstances where people will need to work from home - childcare, illness, issues that we understand - but it shouldn't be a blanket work from home policy.
'We have been calling since the end of Covid restrictions to encourage workforces back. Lots of councils are still work from home, with their buildings still lying empty. And businesses want to encourage people back to our towns and cities.
'So this is a time when the new Labour government need to talk to hospitality more and see the negative impacts of working from home.
'If they want to bring about positive change, they need to make positive moves by speaking to those working within hospitality.'
Kate Nicholls, Chief Executive of UKHospitality, said: 'Many hospitality roles do not lend themselves naturally to working from home.
'After all, you can't serve someone a drink or meal from home. But it's more than just the physical aspect - the interaction between staff and customer is what makes the hospitality experience and it's really important there are exemptions for sectors where these proposed requirements would be simply unworkable.
'While working from home is not practical for most of our roles, the sector is incredibly flexible.
'Whether it is parents that need hours during weekdays or students who prefer to work at night, businesses are able to offer flexible shifts to suit people's needs and lives. This flexibility is what makes it attractive to such a variety of people.'
Beverley Sunderland, a partner at Crossland Employment Solicitors, said: 'There is a marked difference between making sweeping promises in an election manifesto, and understanding the detailed reasons why perhaps this is not as easy as it might appear to be to the untrained eye.
Mr Reynolds' business department is expected to steward the New Deal for Workers
'They will need employment law experts who understand all of the twists and turns and case law and not leave it to civil servants who do not have that experience.
'There is also the spectre of unintended consequences. If the law changes to include day one employment rights (subject to a probationary period) then there is the very real possibility that all those employees currently under two years' service, where the employer is undecided about them, will be dismissed before any new laws come in.'
Ross Meadows, Partner at Oury Clark Solicitors, said: 'The Labour Government's plan to introduce day one employment rights will have massive implications for employers.
'The changes are likely to necessitate rigorous hiring practices and comprehensive onboarding to mitigate the risk of immediate legal disputes.
'Employers will need to invest in robust HR policies and training to ensure compliance and avoid potential litigation. This change will increase operational costs and administrative burdens.
'Smaller businesses are likely to face greater challenges adapting to these requirements, potentially affecting their competitiveness and financial stability.'
Campaign for Real Ale (CAMRA) Chairman Nik Antona said: 'Labour's proposal for increased flexibility for workers is a double-edged sword for UK pubs.
'We know from the increased amount of people working from home during the pandemic and in the years that followed, put a financial strain on pubs in town and city centres. This could continue, with less people travelling into town or city centres for work, we could again see a noticeable drop in footfall for pubs situated in urban centres.
'In spite of this, a rise in flexible working could result in people having extra freedom to support their local pubs, social clubs and taprooms. Working from home can provide more free time in your day to frequent your local pub more often, to enjoy it as a place of community social cohesion after work, or to actually work in. With many pubs offering Wi-Fi, tea and coffee, working from your local pub can also be a convenient and fruitful way to work flexibly.
'While working from home can affect pubs located in city centres, we would like to encourage flexible workers to make the most of the situation and support their great local community pubs.'
Andrea Rasca, CEO and Founder of Mercato Metropolitano and Movimento Metropolitano said: 'While we're encouraged to see the government's focus on better employment rights, and are proud to consider ourselves a London Living Wage employer, the flexible working policy and right to work from home from day 1 outlined in the King's Speech does raise concern for communities and High Streets in the UK that are increasingly disappearing.
Flexible working is important for many groups of people - but we must not forget the importance of our communities in their ability to bring people together in person - whether in towns, cities or at work. Ultimately working completely remotely from day 1 at work means that people miss out on crucial socialising, community building, training and connection.
Inevitably the consequences of this policy will also have an economic impact on hospitality and retail businesses. Local communities and businesses continue to be under huge amounts of pressure with many struggling to stay afloat in difficult economic times. We need to encourage people to come together, to strengthen our communities, participate in local events and support local businesses, who have had to deal with so much hardship over the years.
Without targeted support or incentives to bring people into city centres, we will see a significant reshaping of the hospitality landscape, leading to closures and job losses in an industry that is vital to the vibrancy and economy of our cities. A more permanent shift to increased remote work may only further strain their recovery efforts and long-term success.'
