The Government’s introduction of the “Make Work Pay” bill has drawn sharp criticism from small businesses and employment law experts. The bill, which includes 28 new measures aimed at reforming employment rights, is being viewed as rushed and poorly planned. Concerns are being raised about its potential to impact employment rates, job creation, and economic growth.
A “Rushed Job” That Threatens Small Businesses
Tina McKenzie, Policy Chair at the Federation of Small Businesses (FSB), has been one of the most outspoken critics of the bill. She called it a “rushed job, clumsy, chaotic, and poorly planned,” highlighting how the introduction of 28 new measures at once has left small business employers struggling to understand and adapt to the changes. McKenzie pointed out that the bill lacks a clear pro-growth component, which could lead to increased economic inactivity and threaten the Government’s employment target of 80%.
“There are already 65,000 fewer payroll jobs since Labour took power, and the new Government is sending out a troubling signal to businesses and investors,” McKenzie said.
McKenzie emphasised that small firms are often the employers who give opportunities to individuals farthest from the labour market, such as those returning after long-term health issues or caring responsibilities. She warned that the new legislation could discourage small employers from hiring people who have had significant periods out of work, potentially worsening social exclusion. The additional employment costs brought about by the bill, she argued, could hinder job creation and negatively affect growth and investment.
McKenzie also pointed out that the Chancellor has an opportunity to introduce more pro-business measures to the bill, such as raising the Employment Allowance and reinstating the small business rebate for Statutory Sick Pay. She expressed concerns about the forthcoming consultation on zero-hours contracts and urged the Government to consider the needs of seasonal small businesses and struggling sectors like hospitality and tourism. “Sufficient time should be taken to avoid this becoming a hastily cobbled-together Act of Parliament,” McKenzie added.
Concerns Over Increased Employment Rights
Chris Cuckeny, Senior Associate at Devonshires, commented that while the introduction of more employment rights might be welcome news for employees, it could have significant implications for businesses. He said, 
“Whilst more employment rights will be welcome news for individuals, for businesses the new Employment Rights Bill will be received with some trepidation as it reduces their flexibility in being able to manage their workforce whilst, at the same time, increasing their financial obligations.”
Cuckeny highlighted that the inclusion of day-one unfair dismissal rights could make businesses more hesitant to hire, potentially affecting employment rates and economic growth. He also pointed out the strain this could put on the already overwhelmed Employment Tribunal system, which is facing severe backlogs. “Employment Tribunals are desperately backlogged, with hearings in certain parts of the country already being listed into Summer 2026. Giving employees more rights will inevitably increase the number of legal claims issued, and without substantial investment from the Government to increase resources, these new rights risk overwhelming a Tribunal system that is already on its knees.”
Significant Employment Law Changes
Kate Palmer, Employment Services Director at Peninsula, provided an overview of the key changes in the Make Work Pay bill. She noted that the Government had kept its pledge to bring legislation to Parliament within 100 days of coming into power, which marks the first significant step in implementing Labour’s “Make Work Pay” 
plan.
“Possibly the most significant inclusion is the planned introduction of a day-one right to unfair dismissal protection,” Palmer explained. This proposal is accompanied by a commitment to consult on a statutory probation period of nine months. While full unfair dismissal protection would not apply during this period, employers would need to reassess their “early exit” procedures. “Employers will have a much shorter period to decide on the suitability of an employee before having to engage in what can be lengthy formal procedures to fairly dismiss an employee,” Palmer said.
Palmer also highlighted other major changes in the bill, including a ban on “fire and rehire” practices except in extreme circumstances, the right for zero-hours staff to switch to guaranteed hours contracts if they work regular hours, and an extension of the right to flexible working from day one. Additional rights such as statutory sick pay from the first day of absence, statutory bereavement leave, and day-one rights to parental leave are also part of the new measures.
Palmer cautioned that employers will need to review their contracts, policies, and procedures to comply with the upcoming changes. “Employers should prepare for huge change and ensure they keep on top of every twist and turn so that they can swiftly take action to remain legally compliant,” she said.
Conclusion: Call for More Engagement and Consultation
The introduction of the Make Work Pay bill, while designed to enhance employment rights, has raised concerns about its potential impact on small businesses and the economy. Critics like Tina McKenzie and Chris Cuckeny have urged the Government to take a more measured approach, highlighting the need for more consultation and engagement with small business owners.
As McKenzie concluded, “We look forward to more engagement and the start of a full consultation on each individual measure to ensure the voice of small employers is heard.”
