British retailers have warned that the Government’s refusal to adopt Lords’ amendments to the Employment Rights Bill could undermine its own policy goals, risking job losses and eroding workplace flexibility in one of the country’s largest private sectors.
Lords’ changes rejected amid political push
The Employment Rights Bill, a flagship Labour reform, is designed to clamp down on exploitative practices such as zero-hours contracts and to expand protections around unfair dismissal, flexible working and parental leave.
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But the House of Lords had introduced amendments that softened some of its provisions, including a shift from a legal duty to offer guaranteed-hours contracts to a right to request them, as well as adjustments to dismissal protections and compensation rules for last-minute shift cancellations.
When the Bill returned to the Commons this week, ministers voted down many of those changes. Industry leaders say the Government has “made a rod for its own back” by rejecting what they saw as pragmatic fixes.
Retailers fear unintended consequences
Helen Dickinson, Chief Executive of the British Retail Consortium (BRC), said retailers were “very disappointed” by the decision, warning that half of the sector’s three million employees work part-time and rely on flexibility to balance childcare, study or caring commitments.
She argued that the current draft risks “backfiring”, citing BRC data showing that more than half of retail HR directors (52%) expect the Bill to lead to job losses, while 61% believe it will reduce flexible roles.
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By GlobalDataThe Office for Budget Responsibility has also warned that the reforms could have “material, and probably net negative, economic impacts on employment, prices and productivity.”
“At a time when over one-fifth of the workforce is economically inactive and sick leave is at a record high, this will undermine plans to get Britain working,” Dickinson said.
Outlook for global businesses and investors
The retail industry accepts the Bill’s aim of cracking down on bad employers but stresses the risk of penalising responsible businesses that already provide secure and sustainable jobs.
Part-time roles, they warn, could be the first casualty, reducing pathways back into work for many people.
As consultation on the Bill’s implementation begins this autumn, retailers are preparing to push for changes that make the legislation “fit for purpose.”
International investors and multinational retailers with UK operations will be watching closely: higher compliance costs, reduced labour flexibility and pressure on productivity could shape staffing models, pricing strategies and long-term investment decisions.
The outcome will determine whether the reforms deliver stronger rights without stifling growth — or become a case study in labour laws that, despite good intentions, constrain the very workforce they aim to protect.
