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A left-leaning economics think tank that was the former workplace of Treasury ministers has called for a major change to be made to Labour’s flagship Employment Rights Bill in a last-ditch demand before workers’ rights are written into law. The Resolution Foundation, which was formerly led by Budget mastermind Torsten Bell, has called for a change to ‘day one rights’, the key policy opposed by top business leaders and researchers. In a new briefing, researchers at the think tank warned the government it risked “lurching from one extreme to the other” on workers’ rights and the proposal should be amended immediately. As it stands, the 300-page bill will give dismissed employees the right to sue bosses for unfair dismissal from the first day of work, rather than after a two year period at present. The Resolution Foundation has joined leading industry groups in calling for the reform to be watered down as it said that firms would resist hiring more staff due to added risks and costs. It said that a qualifying period for unfair dismissal cases should instead be reduced to three or six months, per international norms, rather than one day. Controversial employment rights reforms The call by the think tank comes as amendments to the Employment Rights Bill are set to be considered in the House of Lords, having reached its final stages. Labour’s new business secretary Peter Kyle has been adamant that the bill would be passed in full without changes by the end of the year. His emphatic statement at the Labour Party conference last month came after it was suggested some reforms were set to be thrown out following Angela Rayner’s departure from government. In her exit speech last week, Rayner, who has championed the progress of the bill, said new workers’ rights would be a “a game changer for millions stuck in insecure and low paid work”. But Ruth Curtice, chief executive of the Resolution Foundation, said new ‘day one’ rights could undermine efforts to protect low-income workers and job opportunities in the UK economy. “In one aspect the UK risks lurching from one extreme to another – by ending the qualifying period for unfair dismissal protection. “Introducing a new legal probation period alongside this is a messy compromise that risks making it harder for firms to hire, confusing workers, and serving to only benefit employment lawyers.” Labour’s divide from the Resolution Foundation The think-tank’s report is the latest example of a split between the Resolution Foundation and the Labour government in policy direction. The Resolution Foundation also joined business groups in warning the government against applying the national living wage to all over 18-year-olds, rather than over 21-year-olds. It warned that employment for graduates and young adults would worsen if the government chose to add costs for employers given they would be forced to raise wages by as much as seven per cent. “Recent government policy may have worsened young people’s employment chances,” the think tank said last week. “The pattern of job losses in low-wage sectors, where young workers are concentrated, is consistent with an adverse impact from bumper increases to minimum wage rates, combined with the increase to employer National Insurance contributions (NICs), over the past year.”
