Labour’s trade union access reforms could cost small businesses in the UK nearly £700million, according to a think tank.
The overall cost to the Act was originally estimated to cost businesses £1billion a year, however the Adam Smith Institute (ASI) reports this does not include the direct costs to trade union access, which could cost over £1billion alone.
It comes after Labour’s Employment Rights Act, gained Royal Assent in December, it gave employees protections over unfair dismissal, statutory sick pay and zero hour contracts.
The overhaul was previously supported by the Liberal Democrats but has now received growing criticism for the secondary legislation that has a disproportionate cost to small businesses.
Sarah Olney MP, Liberal Democrat Business Spokesperson, said: “The Government must now make sure that secondary legislation arising from the Bill is fair, workable and doesn’t place unnecessary burdens on our SMEs.
“Ministers must work closely with workers and the small business sector to ensure that union access provisions are not an added burden on our vital small businesses.”
According to the report, UK businesses will incur costs to familiarisation, arbitration, general disruption and unionisation, which small businesses will suffer with more.
Small businesses, with under 250 employees, would take on 63% of the overall £1,078,657,364 cost to trade union access alone, £680million.
The Conservatives, since the first reading of the bill, was in opposition and have promised to reverse all of Labour’s changes to employment rights.
The Rt. Hon. Lord Sharpe of Epsom OBE, Shadow Minister for Business and Trade, said: “SMEs are the backbone of the British economy and already face enough challenges without having to devote additional time and effort to dealing with intrusive and expensive union access requests.”
Andrew Griffith, Shadow Secretary of State for Business and Trade said: “No government that is serious about growth would ever impose these ‘one size fits all’ union access rules on small and medium-sized businesses.”
The ASI recommends that the government exempt all SMEs from trade union access provisions, reduce regular union access from weekly to fortnightly or monthly, only permit trade union access to organisations with two or more employees of the said union and restrict union access to workplace breaks or lunchtimes.
Mitchell Palmer, Economist at the Adam Smith Institute, said: “Businesses will have felt slight relief from revisions to the Employment Rights Act, but it’s clear that there is still much work to be done.
“The government has failed to cost mandatory trade union access for businesses, a provision that will disporportionately burden small and medium businesses because they lack the scale to absorb fixed regulatory costs.
“The government needs to significantly narrow the scope of these provisions, including exempting SMEs and limiting the frequency and conditions under which access is granted.”
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