Labour’s plans to ban zero-hour contracts will be a disaster for small business – our firms will go under
SMALL businesses are outraged at the new government’s plan- ned employment laws – with many fearing they will go to the wall and leave staff jobless.
Labour’s Employment Rights Bill claims to improve workers’ lives but many small firms disagree.
Both exploitative zero-hour contracts, which enable employers to hire on a shift-by-shift basis, and “fire and rehire” policies will be banned.
The new laws will also scrap “discriminatory” age bands affecting the National Minimum Wage, so young workers will be entitled to the same pay as more experienced staff.
Plans spearheaded by Deputy Prime Minister Angela Rayner have also been laid out to make parental leave, sick pay and protection from unfair dismissal available from day one of a contract.
Jonny Caisley, director of Gold Star Haulage and Removals in Newcastle upon Tyne, has five staff on zero-hours contracts.
He said: “I can’t give my workers 16 hours a week if no work comes in. I won’t be able to keep them.
“Ending zero-hours contracts means my business will go under.
“They benefit my staff, too. They choose their shifts, which they’re happy with. When I don’t have work, I still have overheads to pay.”
“I work really hard, I have spent four years building my business up, but I will be better off closing down.”
Ash Hough owns The Veg Patch, a Plymouth restaurant and takeaway, and laid off staff in April when the minimum wage was increased.
Now his two part-time staff are on zero-hours contracts and he said: “I really support paying fair wages, but as a small business it’s hard enough to make ends meet as it is.”
Ash also thinks the new measures to level out wages for all age groups is a bad idea: “If people are paid the same regardless of age then no 16-year-olds are going to get hired anywhere.
“At the moment, they get jobs because they are cheaper.”
Tina McKenzie, of the Federation of Small Businesses, said more than nine out of ten small businesses nationwide were unhappy at the plans.
Last year there were 5.5million small or medium-sized businesses, each employing up to 249 people, which represents more than 99 per cent of the business population.
Tina said: “They’re concerned about the prospect of increased costs and risks when they employ people, and there were no commitments in this to look after small employers, who will struggle the most.”
Sola Akinola, who owns Teettam Bakery in Byker, Newcastle, said: “People will take advantage if they get sick pay from day one.
Ending zero-hour contracts means I’ll go under
Jonny Caisley, haulage & removals firm boss
“How do you tell between someone who is genuinely sick and someone who has just been on a heavy night out?
“They will call in sick for anything, as they know they will get paid.
“This will cripple the small independent stores on the high street.”
Sofia Barbaro hoped one day to take over the family business, Enzo hair salon in Durham, but now she doesn’t know if she will be able to.
Her dad Domenico, 61, said: “This is a cheap throwaway political stunt to make people think the Government has done something.
“But when third-party companies who do things such as catering and cleaning raise their costs, businesses will put their prices up, and if the client won’t pay, they will close.
Political stunt
“It becomes a circle. Wages go up, prices go up. No one’s better off.”
He said new rules granting workers rights such as sick pay means he will not take on new staff.
He added: “I would rather work more hours myself to look after my clients.
“If a new member of staff goes off sick and I have to pay them, that could sink my business.
“Some people are hard-working, others aren’t. It’s difficult to determine that from a half-hour interview.”
Sofia said: “These changes put me off taking over altogether.
I support fair wages but it’s hard enough to make ends meet as it is
Ash Hough, Restaurant boss
“Larger companies will be better equipped to deal with them. Many smaller ones will go bust.”
Steven Lightfoot heads Next Generation IT support in Pudsey, West Yorkshire, and employs 11 staff.
He said: “The concept of better employment rights is good, but these changes are shaped towards corporates who are making millions and can afford it.
“I get the side of encouraging employee rights, but we also pay full tax, unlike a lot of corporates who have offshore accounts or are based elsewhere and so we are paying all the additional stuff on top.”
Keith Dowling, from Crayford, South East London, who runs K Dowling Builders, said: “Scrapping zero-hours contracts means I won’t consider employing anybody because as a building company, I need flexibility.
“I can’t afford to pay someone if the work isn’t there.
People will take advantage if they get sick pay from day one in the job
Sola Akinola, Bakery owner
“When you are training someone it is ridiculous to have to pay them the same amount as an experienced tradesman.
“This is cutting the throats of small businesses.
“When so many young people are struggling to find work this is going to make things worse. Small businesses work on a tight budget. This could sink you.”
Nicola Smith, head of employment rights at the TUC, said: “Good employers have nothing to fear from this Employment Rights Bill.
‘This could sink you’
“The sensible measures it seeks to introduce will be good for workers, living standards and businesses.
“We know businesses gain when people feel secure at work and they are treated well.”
A Department for Business and Trade spokesman said modernising the world of work will help raise standards and ensure a level playing field, adding: “A number of the measures already have strong support from businesses, and we will consult with them as we put these plans into practice to make sure they work for small businesses.”