Employment Rights Act risks backfiring for young workers, warns BRC

Opportunities for young people in retail risk being narrowed if poor implementation of reforms aimed at strengthening worker security end up reducing the availability of flexible, entry-level roles, the British Retail Consortium (BRC) has warned. 

New BRC data shows 70% of Gen Z workers (18-29) say flexibility at work is important to them, rising to 73% among those working part-time. Far from being a loophole or poor practice, flexible retail roles are actively chosen by people balancing study and other commitments, caring responsibilities or wanting to gain early work experience.

The warning comes as the Office for Budget Responsibility forecasts unemployment to reach 5.3% this year. With youth unemployment an ‘existential crisis’, according to Alan Milburn, Chair of the Independent Review into Youth and Work, at 16.1% among 16-24 year olds – its highest level in more than a decade - entry routes into work matter more than ever, particularly for young people.

Retail plays a central role in providing these opportunities. Around 780,000 retail jobs are held by 16-25-year-olds, accounting for 28% of the industry’s workforce and making retail the UK’s largest gateway into work. 

The Employment Rights Act, which received Royal Assent last December, aims to improve job security and living standards – ambitions retailers support. But the industry’s concern lies in how the legislation will be implemented.

Taking the wrong approach on provisions such as guaranteed hours risks adding new costs and administrative complexity. Since April last year, the cost of employing a full-time entry-level colleague has risen by 10%, and for someone part-time by over 13%. BRC survey data shows 52% of leading retail Chief Finance Officers plan to reduce hours or overtime in response to these rising employment costs, while 32% expect to freeze recruitment.

If implementation further increases costs or rigidity, businesses will inevitably reassess hiring plans, and entry-level and short-hour roles will likely be the first to be scaled back. The unintended consequence would be fewer opportunities for the very young people the reforms are intended to support.

The BRC calls on the Government to ensure implementation tackles genuine exploitation without undermining the availability of flexible roles. This includes recognising that hours during seasonal peaks cannot be offered throughout the year and taking a realistic approach to expectations for trade union access that do not represent a retailer’s workforce. 

As secondary legislation goes out to consultation, ministers must work closely with industry to avoid unintended consequences at a fragile moment for youth employment.

Helen Dickinson, Chief Executive of the British Retail Consortium, said:
“Local, flexible jobs are important first steps into work for young people across the country. Whether it is a Saturday job to earn extra cash around studies or doing shifts while balancing caring responsibilities or other life commitments. These roles are relied upon and valued by so many.

“Retailers want the Employment Rights Act to live up to its ambition and raise standards and improve job security. But at a time when youth unemployment is high and rising, Government must ensure reforms double down on tackling bad practices and don’t choke off the routes into a first job for the next generation.”