New impact assessment shows increased benefits of Employment Rights Act to workers, businesses and economy

• Updated government impact assessment says the upgrade to workers’ rights will be “significantly positive for society”
• 18 million workers will benefit directly from better working conditions and improved job security – especially women, young workers and disabled people
• Reforms will boost living standards, improve health and wellbeing and help more people stay in work
• Independent TUC analysis shows legislation will deliver an estimated £10bn of benefits for the country, far outstripping any costs
• Updated impact assessment sets out that estimated direct costs to employers will be equivalent to 0.1% of UK pay bill at £1bn a year, and that legislation will be net positive for growth and employment  

An updated impact assessment published today (Wednesday) by the Department for Business and Trade shows that the Employment Rights Act will bring significant benefits to UK workers, our economy and wider society.  

Key benefits the assessment shows will be delivered for workers include: 

• Sick pay reforms mean up to 1.3m low paid employees will now be able to take paid time off when they’re sick.  This will particularly benefit lower paid women.
• Unpaid holiday pay worth hundreds of millions of pounds will be recovered for workers by the new Fair Work Agency. 
• Unfair dismissal protection extended to over 6 million workers who have been with their employer less than two years but more than six months.
• Improved protection from dismissal for pregnant women and new mothers with reductions to unfair dismissals for pregnant women and mums returning from Maternity Leave.
• New bereavement leave for around 2.7 million people each year. 
• 30,000 more fathers or partners to get paternity leave and 1.5 million parents to gain the right to unpaid parental leave from day one. 

The assessment sets out that the Act will deliver significant benefits for the country including improved health, wellbeing and job satisfaction and reduced workplace disputes. It also shows the Act will generate net increases to both GDP and employment. Likely benefits of the legislation are shown to far outweigh the costs, which this updated assessment now estimates are only £1bn a year or 0.1% of the UK’s total pay bill.  

Previously published independent TUC analysis has shown that overall the legislation will deliver an estimated £10bn boost to the country. 

TUC General Secretary Paul Nowak said:  

“The Employment Rights Act will deliver vital common-sense reforms for millions of people across the country – including sick pay for all workers from day one, banning exploitative zero hours contracts and protecting workers from harassment. 

“Too often in this debate the facts are ignored. But stronger rights at work are good for workers and employers – driving up labour market participation, improving health, raising productivity and boosting demand. The Employment Rights Act will deliver an estimated £10bn boost to the economy – gains that far outstrip any costs.   

“Britain will now be brought into line with other countries where workers already have better protections. And crucially, the legislation will give working people the higher living standards and secure incomes that are needed to build a decent life. 

“Good employers will also welcome these changes – the Act protects them from competitors whose business models are built on low-paid, insecure employment. 

“It’s now vital the government finishes the job – ensuring workers feel the benefits of all new protections as soon as possible. That means watertight secondary legislation, delivering these new rights fully and fast.” 

ENDS 

Notes to editors: 

- Updated impact assessment: The new impact assessment on the Employment Rights Act can be found here: https://www.gov.uk/guidance/employment-rights-bill-impact-assessments 

- TUC analysis: Analysis by the TUC and Landman Economics estimates that the wider benefits of the Act will total over £10bn a year: www.tuc.org.uk/research-analysis/reports/modelling-economic-benefits-employment-rights-bill  

- About the TUC: The Trades Union Congress (TUC) exists to make the working world a better place for everyone. We bring together the 5.3 million working people who make up our 47 member unions. We support unions to grow and thrive, and we stand up for everyone who works for a living.