Retailers have raised concerns that Britain’s recently enacted Employment Rights Act could worsen youth unemployment by reducing flexible and entry-level roles. Industry leaders say the legislation, which introduces new workplace protections, may prompt businesses to scale back hiring in positions that younger workers often rely on as their first step into employment.
The law gives employees on zero-hours and low-hours contracts the right to request guaranteed hours, allows statutory sick pay from day one, shortens the qualifying period for unfair dismissal protections, and makes it easier for workers to gain trade union recognition. While the government says the reforms will improve job security for millions, the British Retail Consortium (BRC) warns they could unintentionally restrict opportunities for young people, who frequently depend on part-time or flexible work.
Helen Dickinson, chief executive of the BRC, said flexible roles such as Saturday jobs or shifts around studies are “relied upon and valued by many” young people. She added that with youth unemployment already on the rise, policymakers must ensure reforms improve working conditions without removing these crucial entry points into the labour market.
Youth unemployment is climbing across the UK. Official projections suggest overall unemployment could reach 5.3 per cent this year, while joblessness among 16- to 24-year-olds has reached its highest level in over a decade. Alan Milburn, former Labour health secretary and head of a government review into youth employment, has described the situation as an “existential crisis” for Britain.
The retail sector is a key source of early employment. Around 780,000 retail jobs are held by workers aged 16 to 25, accounting for nearly 28 per cent of the sector’s workforce. Many of these roles involve part-time, weekend, or seasonal work that can be balanced with education or training. A BRC survey found that 70 per cent of 18- to 29-year-olds value flexibility in working hours, compared with 52 per cent of adults overall.
Retailers argue that if the new regulations lead to higher employment costs or administrative burdens, flexible entry-level roles may be reduced, depriving young people of a vital pathway into the workforce. Industry representatives also point to recent increases in employer national insurance contributions and the national living wage as additional pressures on hiring.
The government maintains that businesses will still be able to offer flexible arrangements where both employer and employee agree. A spokesperson said the Employment Rights Act “will boost employment and improve job security for over 18 million workers, with young people among the biggest winners.”
Economists and labour market experts warn that shrinking opportunities for young workers could have lasting consequences for skills development, future earnings, and long-term career prospects. While supporters argue stronger rights create fairer workplaces, critics caution that the reforms could unintentionally discourage job creation at a time when youth employment is already under pressure.
As the UK faces rising youth unemployment and modest economic growth, the law’s impact on flexible roles will be closely watched, with entry-level jobs in retail and hospitality seen as a key barometer of its effects on young workers’ prospects.
