Employment Rights Act risks being a handbrake on hiring

23 Feb 2026

More than a third of UK employers plan to reduce the recruitment of permanent staff due to the Employment Rights Act's (ERA) reforms, says the Chartered Institute of Personnel and Development (CIPD).

A survey published by the CIPD showed that nearly three quarters of employers believe their employment costs will increase because of measures introduced under the ERA.

In addition, more than half of employers expect workplace conflict to increase because of at least one of the changes being introduced.

The survey showed that overall hiring intentions remain at their lowest level on record outside the first year of the pandemic.

Ben Willmott, Head of Public Policy at the CIPD, said: 'Against a backdrop of low business confidence and already weak hiring intentions, our research suggests there is a real risk that the ERA measures will act as a further handbrake on job creation and recruitment.

'In response, it's important that government acts to try and mitigate these potential negative consequences, including through meaningful consultation and where necessary compromise on key measures still to be decided in secondary legislation.

'We need to see a major communication campaign from government to ensure smaller businesses in particular are aware of, understand and can prepare for the new legal obligations and know when they come in to affect.'