The Employment Rights Act (ERA) is likely to increase employment costs, weaken permanent job creation, and could increase workplace conflict in Scotland, new research by CIPD claims.

The CIPD’s Labour Market Outlook shows that three in ten (30 per cent) employers in Scotland plan to hire fewer permanent staff due to key reforms in the ERA, while overall hiring intentions remain at their lowest level on record outside the first year of the pandemic.

The subdued hiring intentions are not surprising given three in four employers (72 per cent) in Scotland expect the incoming employment law reforms to increase their employment costs to some extent. Close to half (47 per cent) of Scottish employers also expect workplace conflict to increase because of at least one or more of the key legislative reforms being introduced.

These are the headline findings of the CIPD’s quarterly Labour Market Outlook report which surveys more than 2,000 UK employers on their hiring, pay and redundancy intentions.

In response, and to prevent the ERA “undermining employment growth”, the CIPD is calling on the UK and Scottish governments to:

• Continue to consult meaningfully with employers and business bodies and, where necessary, compromise on key measures still to be finalised to ensure they can be implemented without adding to the costs and legal risks of recruiting and managing staff.
• Launch a communications campaign as soon as possible to ensure employers, and small firms in particular,...

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