Angela Rayner’s plan for a radical overhaul of workers’ rights is putting most businesses off hiring.
More than half of bosses said they were less likely to hire new workers as a result of the planned employment rights bill, which is being spearheaded by the Deputy Prime Minister.
The sweeping reforms would see workers handed “basic rights” from day one, including sick pay, with staff also empowered to ignore emails outside regular working hours.
The Government has also said it will ban “exploitative zero-hours contracts” and give staff more power to demand flexible working, including a four-day week.
Some 57pc of executives surveyed by the Institute of Directors (IoD) said they were “less likely to hire” as a result of the changes.
While a third of executives polled said the plans would have “no impact”, just 2pc suggested they would take on more workers as a result of the changes.
Alexandra Hall-Chen at the IoD said new legislation could act as a deterrent to employers who would otherwise expand their payrolls.
She said: “Business leaders are concerned about the impacts of the proposed new reforms on the cost of employing staff.”
Many business leaders were supportive of Labour in the run up to the July election but the mood has soured in the months since.
The IoD warned last week of a collapse in business confidence sparked by fears of an autumn tax raid.
Ms Hall-Chen urged the Government to involve business in the roll-out of its workers’ rights plan.
She said: “The Government’s self-imposed deadline for the introduction of employment rights legislation is now just over a month away.
“Time is running out, so it is essential that the Government starts to meaningfully engage with business on the detail of its proposed reforms to ensure that its growth mission is not derailed.”
Separately, the Low Pay Commission has also recommended that the minimum wage rise by 6pc to above £12 an hour for the first time.
The advisory body also said it may recommend an even higher figure than £12.10 after Labour changed its remit on taking power to ensure a “genuine living wage”.
Business groups warned that higher wages would also put investment at risk. Tom Ironside at the British Retail Consortium said: “Retailers strongly support the objective of higher wages and pay growth in the industry has outpaced the UK economy in eight of the last nine years.
“However, with retailers facing rising business costs, including increasing business rates and fees, the combined impact of additional costs will add to the pressure on businesses and limit their ability to invest.
“This is why it is essential that wider economic conditions are factored into decisions on the National Living Wage and that a moderate approach to increases is adopted.”
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