Industrial Recruitment Sector Responds to Employment Rights Bill Reforms

The newly launched Employment Rights Bill has sparked widespread attention within the recruitment industry, though the overall response has been a cautious "wait and see." The package includes 28 significant reforms, with implementation expected by 2026. These reforms aim to reshape the UK’s employment landscape, impacting industries that rely on both permanent and temporary workers, such as manufacturing, construction, logistics, and other industrial sectors.

The government’s accompanying Next Steps document outlines provisions for future consultations, including key topics relevant to agency workers. This has been welcomed by industrial recruitment leaders, who are eager to engage in discussions about the unique needs of their clients and workers.

What Do The Proposed Labour Government Reforms Mean for Industrial Employers?

The recruitment team at law firm Osborne Clarke shared their perspective: "We expect consultations on these reforms to begin in 2025, with the majority of changes taking effect in 2026. Of particular importance to the industrial sector will be reforms to unfair dismissal, which won’t take effect until autumn 2026. This provides a crucial window for businesses to adapt."

A central concern for industrial employers is the potential for over-regulation of flexible work arrangements. Many industrial sectors rely heavily on temporary and flexible contracts to meet fluctuating demand, and proposals to curb zero-hours contracts could limit the availability of flexible work, which many workers value.

Concerns Around Day One Employment Rights

There is growing worry that the introduction of Day One employment rights will increase hiring costs. For industrial employers, who often operate on tight margins, additional requirements—such as providing sick pay from the first day of employment—could deter hiring. This concern comes at a time when employers are already postponing new hires, which has negatively affected recruitment agencies.

Industry Voices: Recruitment Experts Weigh In

Neil Carberry, CEO of the Recruitment & Employment Confederation, commented: "While businesses can see the roadmap for employment rights under this government, there is good news in the long timeline for these reforms. The commitment to consultation is critical, as many of the key details are yet to be ironed out. However, the balancing act between pro-business and pro-worker policies remains delicate. Nothing supports workers more than a healthy job market, where businesses feel confident enough to create jobs."

On zero-hours contracts, Carberry added: "Too often, zero-hours contracts are portrayed negatively, but many workers in industrial and flexible roles choose this model because it fits their lifestyle. The rejection of an outright ban on zero-hours contracts is welcome, but even the current proposals could present challenges if implemented without consideration of workers’ needs."

Carberry also highlighted concerns around Day One sick pay: "For industrial recruitment agencies, this could mean increased costs. Agencies will need to work closely with clients to ensure they understand that these changes will impact their fees. There may be a need for government support to help educate clients about these upcoming changes."

Risks for Industrial Staffing Agencies

Tania Bowers, global public policy director at the Association of Professional Staffing Companies (APSCo), emphasised the importance of consultations: "While we support the government’s efforts to improve employment conditions, the details will be critical. We urge policymakers to take full advantage of the knowledge within the industrial staffing sector to ensure that these reforms are practical and valuable for all stakeholders."

APSCo has expressed concerns about the introduction of Day One rights, which could push employers to shift risks onto staffing companies. This could create complications for recruitment agencies that specialize in providing flexible labour for industrial clients.

Bowers further commented: "Industrial sectors rely heavily on a flexible workforce, from skilled contractors to temporary labour. Over-legislation could restrict this flexibility and unintentionally harm both the workers who value it, and the businesses that rely on it. The diverse nature of the industrial workforce means that one-size-fits-all legislation could be detrimental."

Potential Impact on Recruitment Practices

Legal experts also pointed out that industrial employers may become more risk-averse when hiring due to the introduction of Day One unfair dismissal rights, coupled with statutory probation periods. This could lead to hiring freezes or a more cautious approach to recruitment, which would further impact industrial staffing agencies that are already facing challenges in securing new contracts.

Osborne Clarke warned: "Employers will need to reassess their staffing levels and policies, especially with the removal of the statutory sick pay waiting period. This could lead to more careful management of short-term absences, particularly in sectors where temporary and agency workers are a crucial part of operations."

Conclusion: What’s Next for Industrial Recruitment?

For industrial recruitment agencies, the upcoming Employment Rights Bill reforms will bring both challenges and opportunities. The government’s commitment to consulting with industry leaders is promising, but the details will determine how effectively the industrial sector can navigate these changes.

Recruiters will need to be proactive in educating their clients about the financial implications of the reforms and preparing for changes to employment contracts, particularly for temporary workers. At the same time, maintaining flexibility in the labour market will be key to ensuring that businesses can continue to thrive while offering workers the protections they deserve.

“As these reforms evolve, the industrial recruitment sector must be ready to adapt to a changing regulatory landscape but also be prepared to stay engaged in consultations, advocate for practical solutions, and warn law-makers of unintended consequences,” said KPI Sales Director Joe Jardine. “The UK has been a leader in flexible working which has made our economy much more competitive in the global market.”