Employment Rights: Impact on Businesses

Jim Shannon Excerpts

Tuesday 16th September 2025 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

It is an absolute pleasure to serve under your chairship, Dr Murrison. I thank the hon. and gallant Member for Spelthorne (Lincoln Jopp) for his passion on this topic, which he illustrated incredibly well in his contribution. The issues that he raised are the ones that were in my speaking notes to highlight to the Government yesterday during the Employment Rights Bill debate.

What a pleasure it is to see the Minister in her place. I wish her all the best for the future. I am sure her energy and enthusiasm will help her along the way.

We are all very aware that small businesses are the backbone of the British economy, as the hon. Member for Spelthorne said. In March 2025, some 89.3% of businesses in Northern Ireland—72,465, to be precise—were micro-sized, with fewer than 10 employees. Only 2.2% of businesses had more than 50 employees. Four in 10 businesses —some 39.6%—had a turnover of less than £100,000, while a smaller 12.8% had a turnover exceeding £1 million.

These are not our Tescos and Waitroses, with their human resources departments and access to civil service occupational health services. These are small shops, for whom paying £250 for an occupational health referral body is a big deal. The impact on small businesses in my constituency is absolutely ginormous and will have great effect. They include local restaurants that cannot afford to pay their staff sick pay and get other staff in to replace them. They either step in themselves and do their own work through the night, or staff all work even harder than they already are to take up the slack, because they understand the financial pressures.

The Federation of Small Businesses has said that sickness absence already costs an average small employer more than £3,500 a year, or £5 billion across the economy. The Employment Rights Bill will see those costs rise dramatically from next April. We need a better focus from the Government and, with great respect, from the Minister and her Department, on helping small firms look after people and get them back into healthy work. I know the Government have said that is part of their policy, and I do not doubt it, but we need to see how that is going to work.

There is a clear impact for businesses, whose national insurance contributions for staff have risen, whose energy costs have spiralled out of all proportion, and whose staff wages have increased while the public’s disposable income has stagnated or decreased. The pressure on the high street is something that I have not experienced for a long time, but I see the pressures there—when people go, they are not replaced, and everyone is working that bit harder to make ends meet.

Tesco can weather the storm with its small profit margin but big reach, because that is how it works, but the local corner shop is not in that position. We must ensure that we support small businesses with the financial help to which the companies with a bigger turnover should not be entitled. I know that the Minister’s reply will give us some hope that I can pass on to my constituents back home and to the small businesses, which are a crucial part of the economic life of Strangford. Staff must be supported, but so too must small businesses. We need to step up now before the backbone of our economy breaks under the additional strain.

Employees deserve rights, but small businesses need support. We cannot have one without the other, so I ask the Minister how we can get that balance. How can we ensure that small businesses can keep employing people and will still be in business next year, while also ensuring that workers’ rights are protected?