The UK’s Chartered Institute of Personnel and Development has urged the government to prioritise an implementation plan for the Employment Rights Bill amid concerns by businesses that they face additional costs under the proposed law.

According to a CIPD survey of more than 2,000 employers, 79% of respondents expect that hundreds of amendments made to the bill earlier this week will increase employment costs.

The amendments, recommended by the Business and Trade committee, include changes to unfair dismissal rules, statutory sick pay reforms and the right to guaranteed hours for employees on zero-hour contracts.

“The success of the bill depends on effective consultation, a clear implementation plan, appropriate support and proper enforcement,” Peter Cheese, CEO of the CIPD, said in a statement. 

“Without this, there is a risk that new laws, which the government hopes will improve working lives, could have the unintended consequences of undermining job creation and efforts to boost labour market participation and growth.”

The Employment Rights Bill is part of the Labour government’s wider Make Work Pay plan that aims to overhaul the UK’s employment law in what it describes as the “biggest upgrade to workers’ rights in a generation.”

Among the survey respondents, 30% said they would manage the additional costs by reducing the number of employees through redundancies or recruiting fewer workers, and 23% would introduce or increase automation.

Another 22% said they would cut back on training to offset the extra costs, 17% planned to reduce staff hours and 17% would increase the share of their temporary workforce.

Changes to the rules on unfair dismissal and new rights for trade unions are among the areas of most concern for employers, the survey found. However, there is still little detail from the government regarding these changes, it said.

Meanwhile, removing the unfair dismissal qualifying period and introducing a new statutory probation period is the change most likely to see employers make redundancies, according to the CIPD research.

The CIPD also warned that the bill’s scale and complexity could compound the challenges facing many employers following recent increases in employer National Insurance costs, the National Living Wage and business rates.

There is also the risk of accidental non-compliance among businesses, particularly smaller firms with fewer or no HR resources, which will put pressure on an already overstretched tribunal system, the CIPD said.

“The government’s own impact assessment on the bill estimated a 15% increase in employment tribunal claims as a result of the bill’s measures,” the CIPD noted.