Rayner is right: Britain will benefit from a workers’ rights Bill

Are you an employer who supports or disagrees with Labour’s employment reforms? We want to hear from you, email: money@telegraph.co.uk.

This is a minority view amongst Conservatives – and I suspect, Telegraph readers – but there is much in Labour’s Employment Rights Bill that I welcome as a business leader. I believe it will benefit both workers – and companies – in this country.

I was chief executive of an investment business for 15 years, during which time pre-tax profits grew almost eightfold, an average 15pc a year, over a period that included the global financial crisis.

That success and resilience was due to a talented and hard-working team, loyal to the business largely because they were treated well. It was not a big company, but we offered enhanced maternity leave from day one, and anyone could request flexible working 12 years before that was required by law.

Of course, I am very conscious of the need to limit both administrative and financial burdens on firms. Indeed, some measures originally proposed by the Government are already being watered down to relieve the pressure on employers who are also having to grapple with rising National Insurance this week.

And more work needs to be done to quantify additional costs to employers from the comprehensive raft of proposed changes, some of which may not actually create benefits for employees.

But a high level of employee engagement is also key to the bottom line.

At present, UK annual employee turnover is 34pc, according to the CIPD. A third of workers are so disengaged that they leave within 12 months. The cost of replacing them is huge, up to twice the outgoing employee’s annual salary and it can take months to retrain a new recruit.

So I do not agree with objections, including from various business lobby groups, that this Bill will layer on costs without benefits. It requires a raising of standards in how employees are treated, especially the low-paid and vulnerable, such as pregnant women.

Treating people decently is something that should be the norm from their very first day in a new job – a week’s (unpaid) bereavement leave, for example, is surely a minimum humane offering.

Sadly, not all firms do treat their staff well nor seem inclined to do so voluntarily. They are too focused on short-term profits rather than sustained success.

In my extensive first-hand experience, if employees are treated fairly, they will more than repay this in loyalty and increased productivity.

Improved productivity is something this country badly needs.

You may be sceptical. Let me share one example where a long-term vision, not a short-term spreadsheet, paid dividends for insurance company Aviva, which introduced six months equal paid parental leave in 2017.

I asked how they budgeted for this groundbreaking policy – they said they didn’t actually know what the costs would be, but knew employees with happy family lives would be more likely to stay and develop their careers at Aviva. They decided they simply should do it.

The policy has been a resounding success, both in terms of take-up (men take an average five months’ paternity leave) and talent attraction and retention. The costs are more than offset by benefits, including lower recruitment expenses. Meanwhile, Aviva’s share price is up 125pc in the past five years (and the stock yields 6.5pc).

I don’t agree with everything in the Bill, which is currently working its way through the House of Lords. Amendments are needed to improve the balance between employers and employees.

I am going to table amendments that strengthen the suggested ‘“protection from harassment” provisions. Readers will be familiar with high-profile cases of sexual harassment reported in the newspapers, but I’m afraid that’s just the tip of the iceberg.

The Diversity Project, which I chair, works to improve culture in the investment industry. It has provided a confidential safe space for employees to report poor behaviours since the CBI sexual misconduct scandal broke in 2023.

Over 30 reports have been submitted, 90pc from women, and their accounts show that sexual harassment remains a problem. All too often, non-disclosure agreements (NDAs), are used to buy silence rather than address bad behaviour. And we do not know how often NDAs are used, since even regulated companies are not required to disclose that.

Everyone should feel completely confident from the first day in a job that they will not suffer from sexual harassment at work. I will therefore be proposing amendments in the next stage of the Bill to restrict the use of NDAs for sexual harassment.

It’s clearly not a party-political issue, and I hope to build an alliance across the House. The initial reaction was encouraging from both men and women.

Even if the Bill divides opinion for some of the other measures it introduces, this is surely something we can all agree on.