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UK labour reforms to cut hiring by one in three employers, survey shows

A survey of 2,082 UK firms shows 37% plan to reduce permanent hiring due to higher costs and workplace conflicts from new labour laws, the Chartered Institute of Personnel and Development said.

  • On Feb 16, the Chartered Institute of Personnel and Development reported more than one in three UK employers plan to cut permanent hiring, with overall intentions at their lowest since the COVID pandemic's first year.
  • The reforms include a day one right to statutory sick pay, expanded trade union recognition, changes to zero-hours contracts and a shorter unfair dismissal qualifying period, Ben Willmott of the CIPD warned these risk `a further handbrake on job creation and recruitment`.
  • The CIPD survey of 2,082 employers found that 55 per cent expect increased workplace conflict due to reforms, conducted between December 18 and January 16.
  • The CIPD cautioned the Employment Rights Act could push employers to use more temporary workers, while government economists estimate it will cost businesses 1 billion pounds annually.
  • The Labour Party government of Prime Minister Keir Starmer secured approval for the Employment Rights Act in December, but Whitehall found only 4 per cent of employers expected fewer disputes despite predicted tribunal cost reductions.
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Reuters broke the news in United Kingdom on Monday, February 16, 2026.
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