Here’s a sentence you don’t see very often, but hats off to the Regulatory Policy Committee for its excoriating review last week of the thinking behind the new Employment Rights Bill.

The RPC is a body set up by the Labour government in 2009 as part of its Better Regulation Framework to ensure that the potential impacts of UK legislation are properly considered before it is enacted. Its report on the Employment Rights Bill is a masterclass in measured understatement, but the underlying message is very clear – large parts of the Bill are currently without demonstrated objective justification or consideration of their possible consequences for employers and the wider economy. To be clear, the RPC is not saying that those provisions are necessarily inappropriate, merely that there is somewhere between little and no evidence either that change is required in those respects or that the path taken by the Bill is the best of the available options if it is. The supporting impact assessments for eight out of 23 measures in the Bill and as a whole are expressly and repeatedly described by the RPC as rushed and “not fit for purpose”, with a number further described as either weak or very weak.

None of this will come as a surprise to anyone except Angela Rayner, since the subjugation of many of the measures in the Bill to political expediency and dogma has been obvious from the start. Anyone else whose baby had received such an immediate, comprehensive and laughably predictable shoeing would be in hiding by now, and so far the silence from the Department of Business and Trade on this has been noticeable.

Despite the government’s press release on the Bill, even those parts of it which are accurate, there is nothing in the impact assessments which points to any benefits or assistance at all to employers or which considers where all the additional compliance costs to them will come from, thus side-stepping the obvious but politically suicidal answer – reduced corporate profitability and increased consumer prices. And what costs they are – the RPC estimates that the Bill will not boost the economy as trumpeted by the DBT, but instead ding it to the tune of an eye-watering £2.8 billion over the next decade. The opportunity cost in lost improvements to public infrastructure doesn’t bear thinking about (indeed, clearly hasn’t been thought about) and on the face of it, directly inimical to the government’s own agenda. “Overall“, says the report in shouty bold type, “the RPC has a low level of confidence in the estimated direct impacts included in the impact assessment”.

Taking some of those particularly poorly evidenced points in turn:-

1. Ms Rayner’s vaunted Day One unfair dismissal rights vote-winner is chief among the provisions of the Bill ruled fully “red”, a clean sweep of inadequacy across all three heads of the RPC’s scrutiny – the rationale for changing the existing law, identification of options and justification of the preferred way forward, not one of them properly evidenced. In particular, the assessment which was produced accepted in terms that it lacked “robust data on the incidence of dismissal for those under two years of employment”, or in fact of the “existence of the problem being addressed” in the first place. There was no adequate explanation of why fairness between employees and employers could not be achieved by a reduction in the UD qualifying period rather than its removal altogether, in particular having regard to the continuing vacuum around the arrangements which will be applicable during the permitted probationary period. Most damningly, the impact assessment for this absolutely fundamental plank of the government’s employment agenda fails to “clarify whether there are additional costs to business, including salary costs during performance management, during disputes, retention costs from tribunal-risk aversion and increased settlements offered to avoid legal claims”, and “how day one rights might affect recruitment, employee turnover or retention rates“. It’s just soul-destroying stuff.
2. The flexible working terms are also redder than Santa. There is “little evidence presented that employers are rejecting requests unreasonably”, so undermining the whole point of the change to make flexible working the default. There was also no visible consideration of options other than that on the one hand or doing nothing on the other.
3. Completing the inglorious hat-trick of provisions found ostensibly unsupported by any actual thought beyond dog-whistle political sound-bites (my words, but the RPC’s sentiment) comes the employer’s duty to offer protection from third party sexual harassment. Particularly having regard to the abandonment of the original Equality Act version of this as both unnecessary and unworkable, you might have hoped that the impact assessment for this new attempt would at least have looked at least at non-regulatory alternatives, “costs to businesses of taking steps required to prevent the harassment” or even the basic question of “the prevalence of third party harassment and its impact“. To justify this provision in the Bill, says the RPC, “a much stronger assessment of risks” is required.

It is necessary to repeat that the RPC is not saying that all the terms of the Employment Bill are necessarily inappropriate, just that the need for and potential impacts of some of its most major provisions is substantially unproven. It hardly inspires confidence in the finished product, frankly. This self-inflicted knee in the legislative groin presents a unique opportunity for employers to fill that evidential vacuum by responding in numbers to the intended consultation process, setting out in as much detail as possible all the potential problems which they feel the Bill drops on them. You can do this direct or via us as you prefer, but if you have reservations about these particular measures or any of the other dubiously-supported provisions in the Bill highlighted in the RPC report, this will be your last chance. Please use it wisely.