By Tracy Viner, Executive Manager of Policy and Public Impact at Sheffield Chamber of Commerce.
As the Employment Rights Bill (ERB) continues its journey through the House of Lords Committee stage and is continuing to hear from businesses, Sheffield Chamber of Commerce remains deeply engaged, actively lobbying for vital amendments.
The outcome of this Bill could significantly shape the recruitment landscape across South Yorkshire and have direct consequences for initiatives like the new Pathways to Work scheme – an important regional programme focused on tackling economic inactivity and matching individuals with meaningful employment.
While the Bill’s aim to modernise workplace rights is commendable, many of its current proposals could create unintended barriers to hiring, particularly for small and medium-sized enterprises (SMEs) which are the backbone of South Yorkshire’s economy. The government’s own impact assessment suggests a £5 billion cost to businesses, which could strain already tight margins, reduce recruitment appetite, and hinder regional economic growth.
Take, for example, the Bill’s proposal to grant unfair dismissal rights from day one of employment. Following strong lobbying efforts from business organisations including the British Chambers of Commerce (BCC), the government has proposed a statutory probation period of nine months – something Sheffield Chamber supports.
However, we continue to call for clear legal safeguards ensuring that employers who fairly dismiss underperforming employees during this period are not exposed to employment tribunals.
Without clarity, employers may hesitate to take on new hires, especially those entering work for the first time or returning after a career break – precisely the groups targeted by Pathways to Work.
Another key concern relates to zero-hours contracts. The Bill currently mandates a 12-week reference period for calculating regular hours and offering permanent contracts. This one-size-fits-all approach does not align with the reality of sectors like hospitality, logistics, and retail, where seasonal fluctuations are common. Sheffield Chamber supports amendments to extend this reference period to a minimum of 26 weeks and to convert the obligation to offer regular hours into a right to request them. Flexibility is crucial for both employers and workers – especially for those choosing irregular work due to personal circumstances.
Further proposals, such as lowering thresholds for trade union recognition and industrial action, also risk creating instability. Sheffield Chamber urges caution and welcomes the government’s decision to delay changes to strike ballot rules pending further consultation.
Additionally, proposals to remove the three-day waiting period for Statutory Sick Pay (SSP) could disproportionately burden small firms. While we support fair access to SSP, introducing it from day one risks encouraging short-term absences and driving up costs. A targeted SSP rebate for small employers should be reintroduced to offset this impact.
The Pathways to Work scheme depends on an employment environment that encourages inclusive recruitment and flexibility. Legislation that increases complexity, cost, and uncertainty will undermine these goals. As the Bill progresses, Sheffield Chamber will continue its advocacy to ensure that the final legislation supports – not stifles – employment growth in South Yorkshire.
Ultimately, whether the Employment Rights Bill becomes a progressive step forward or a missed opportunity will depend on Parliament’s willingness to listen to the voice of business and strike a pragmatic balance.
