More rights, fewer jobs?
Labour’s Employment Rights Bill looks good on paper – but by piling on more hassle and expense for employers, it may mean fewer opportunities, especially for young people, says Omar Mohamed.
The Employment Rights Bill is now at its final report stage in the House of Lords, having passed through the Commons. According to the government, ‘the Bill will represent the biggest upgrade in employment rights for a generation’. But as Omar Mohamed explains below, there are serious concerns that the Bill – and wider decisions made by Labour – will actually make life harder for many.
Below Omar’s article, you can also find three videos of speeches I’ve made in relation to the Bill - on the ‘banter ban’, statutory sick pay and zero-hours contracts.
Claire
As a hospitality worker, the Employment Rights Bill – designed with the primary focus of improving workers’ rights, especially in times of uncertainty – brightens my soul. Alas, that taste of joy turned into ashes in my mouth when I read what the bill proposes. I believe this bill will not be a saviour for employees, but rather an absolute disaster.
This bill aims to be the ‘biggest upgrade to rights at work for a generation’. It plans to ban exploitative zero-hours contracts and make statutory sick pay a legal right for all workers. It will ban fire-and-rehire schemes, and attempt to improve workers’ rights. It will provide for flexible working from the outset of employment, and create the Fair Work Agency – though in all likelihood, it will be another useless government agency, as we shall see.
This bill will create new legal risks, it will increase administrative demands on companies and organisations, and it will narrow the scope for informal flexibility in managing staff. What is meant to be a boost in workers’ rights will lead to a massive reduction in workers' opportunities.
The bill may seem good on paper. However, its impact will be horrible for hospitality workers like me. Young people (aged 16 to 24) make up around half of the workforce in hospitality, while they make up 10 per cent of the total workforce. For many young people, it is a stepping stone, while they wait for other opportunities or a place to earn money while they are doing their studies. For me, there is the added benefit of talking to pretty ladies! Unfortunately, this bill will compound the problems faced by hospitality, an industry already on its knees.
Operational costs for the hospitality sector have massively increased over the past couple of years. The government has increased the minimum wage, increased employer national insurance contributions and reduced retail business rates, leading to an expected increase in costs of £3.4 billion nationally. Due to this increased cost, one-third of hospitality businesses are now operating at a loss and are at risk of failure, while 60 per cent of businesses have had to cut jobs, to mitigate cost increases and keep trading. Already, more than 300 pubs have closed in the first three months of 2025.
These are turbulent times, yet the government still plans to go ahead with its Employment Rights Bill, adding even more cost and trouble to an industry already weakened. This Labour government has promised growth, but will deliver the opposite.
Hospitality is an industry that has been flexible enough to rely on youth employment and allowed many of us a way into work. It has taught us many useful lessons and has built my confidence as a person. Now I fear that the legislation will reduce these opportunities and misses the mark.
For example, working in hospitality has improved my communication skills significantly as I negotiate with customers, with jokes (and the odd complaint). Unfortunately, those opportunities will be reduced due to this government's ineptitude in dealing with business uncertainty. Will that young person who is studying at university, desperately looking for opportunities to earn cash to survive, still be able to find work? Or are they another group of people this government has failed?
A survey done by the Higher Education Policy Institute in 2025 found a record 68 per cent of students had paid employment while they were studying. As the cost-of-living crisis has forced many young people to work while studying, hospitality is a preferred destination. Will this new law reduce the chances for young people desperate for an opportunity?
Piling more regulation on top of higher employment costs threatens businesses and job creation. For example, the flexibility of zero-hours contracts allows employers to offer work and, in many situations, employees to choose when to work. Having a right to ask for fixed hours is one thing; banning flexible arrangements outright seems like a bad idea that makes sectors like hospitality even harder.
Surely we do not want to see more businesses shutting down. This government has promised growth and delivered the opposite. This government has promised to ‘steady the ship’ and delivered the opposite. This government is now promising to improve workers’ rights and I fear they will deliver the opposite.
The proposed Fair Work Agency aims to streamline the enforcement of employment laws. It will have the power to investigate, prosecute and impose penalties on employers who violate employment laws. But many critics see this agency as the ‘banter police’ with its potential to legislate ‘offensive speech’. I have witnessed what ‘legislating offensive speech’ has done at university, with its HR officers and its bureaucratic student unions. If we introduce this Orwellian banter police to the workplace, it will be disastrous for the working environment, as it has been in university.
This bill sums up the current Labour government: well-meaning legislation that will miss the mark, that will cause more problems than it will solve. This party has no clue what working-class people face.
CLAIRE FOX’S SPEECHES IN THE HOUSE OF LORDS
 | A guest post by
|