Workers’ rights package is ‘overdue and welcome’, says Ella’s Kitchen founder
The government’s workers’ rights overhaul contains positive measures that will allow financially sustainable businesses to flourish, one of the UK’s leading entrepreneurs has said, calling for proper consultation with businesses on changes to the probation period.
Paul Lindley OBE, the founder of the UK’s largest baby food brand Ella’s Kitchen and a pioneer of the purposeful business movement, called criticism that the overhaul had received from some corners of the business community “ridiculous”.
“I think the reforms that are going through Parliament now are both overdue and welcome,” he told City PM. “The legislation evens out the playing field to [ensure all companies are doing] what successful companies are already doing. It shows that that combination of labour and capital on the same side of the equation can motivate a team to deliver things together.”
The intervention from Lindley – who sold Ella’s kitchen to Nasdaq-listed Hain Celestial Group for over $100m (then £66m) in 2016 – comes despite several business groups warning the government package will hurt smaller firms.
The Federation of Small Business has previously called on government to exempt small and medium-sized businesses (SMEs) from any punitive measures it plans to introduce for culpable firms.
Flagship measures of the Employment Rights Bill, which was an integral part of the Labour manifesto and is currently going through committee stage in Parliament, include outlawing fire and rehire practices, ending “exploitative zero hours contracts”, and protecting workers from unfair dismissal from day one of employment.
Lindley, who is now chancellor of Reading University, said he supported “everything that [he could] see” in the bill, but urged the government to hear representations from businesses regarding employment rights from staff’s first day.
“The consultation around probation periods is critical,” he said. “We gave everyone rights from day one, but we were very clear that day one is still part of the recruitment process until your probation period was over. As long as that [carve out] is there, I think criticism is ridiculous.”
Separately, the serial entrepreneur and angel investor, who also founded the children’s bathroom toiletries brand Paddy’s Bathroom, also threw his weight behind some of the more contested measures in last week’s Budget.
Tax rises announced by Rachel Reeves, including rises in employers’ national insurance contributions (NICs) and Business Asset Disposal Relief (BADR), have drawn the ire of many in the SME and entrepreneurial community, with James Dyson branding the package “spiteful”.
But Lindley told City PM: “The rise in employer contributions to National Insurance is a sensible, measured response to the huge pressures on our public services.
“It’s a cost that businesses can plan for and bear and is still lower than it was just two years ago.”
And on BADR, Lindley said: “When I sold Ella’s Kitchen in 2013 the rate of BADR did not impact my decision-making, I wanted what was best for the business and its future. It also did not register in my decision-making when I founded the business, as BADR did not even exist.
“The Budget’s changes to the regime will not have any significant negative impact upon entrepreneurial enthusiasm. Tax reliefs are fundamentally not what drive founders’ long-term decisions.”