UK business groups urge Parliament to pass Employment Bill

Leading UK business groups have urged Parliament to approve the government’s employment Bill, stressing that constructive dialogue with government and trade unions has already delivered meaningful progress, particularly on unfair dismissal reforms.

In a joint letter to the Secretary of State for Business and Trade, the British Chambers of Commerce, Chartered Institute of Personnel and Development, Confederation of British Industry, Federation of Small Businesses, Recruitment and Employment Confederation, and Small Business Britain welcomed agreement on a six-month qualifying period for unfair dismissal claims. They said the outcome, reached through good-faith tripartite discussions, represents a significant step forward that could support growth and job creation.

The organisations said retaining a qualifying period would make the transition easier for employers and called on government to support businesses in strengthening workplace policies and practices. This, they argued, would help employers use the six-month period effectively to address performance or behavioural issues at an early stage.

On compensation, the groups underlined the importance of a clear and structured regime for unfair dismissal claims, saying it helps manage expectations, supports faster dispute resolution, and reduces strain on an already overstretched employment tribunal system. They confirmed their agreement to remove the 52-week cap on compensation, noting that this effectively lifts the cap for all but the highest-paid workers.

However, they said no compromise had been reached with trade unions over removing the cash cap entirely.

“Unfortunately, we have not been able to reach a compromise that satisfies both the unions’ request for removal of the cash cap and our position of retaining it while raising the overall limit,” the groups said.

The letter welcomed the government’s commitment to review the Dispute Resolution System and said the signatories would engage constructively in that process. More broadly, they argued that continuing collaboration through secondary legislation is the best way to address outstanding concerns while protecting the agreed six-month qualifying period.

While businesses still have reservations about other provisions in the Bill, including guaranteed-hours contracts, treatment of seasonal and temporary workers, industrial action thresholds, and the practical application of union rules, the groups said workable solutions could be found through an ongoing tripartite approach.

They urged the government to reaffirm its commitment to sustained dialogue with employers and unions, ensuring that secondary legislation is implemented in the same spirit of compromise that has delivered progress so far.

ALCHEMPro News Desk (HU)