Employers are even more concerned about the upcoming reforms to workers' rights set to come into place as part of the Government’s plan to ‘Make Work Pay’ than the highly criticised National Insurance rises put forward in last year’s budget.
In a survey of 252 business leaders, conducted by Hanbury Strategy, more than a third of respondents (34%) said the biggest challenge facing their organisation in 2025 was the anticipated impact of the new legislation on workforce flexibility. 27% of respondents were most concerned about the impact of additional administrative and compliance costs caused by new legislation.
Only 19% of respondents cited the National Insurance changes announced in last year’s budget, which will come into place in April, as their biggest concern. Just under a fifth of employers (17%) were most concerned about potential legal challenges caused by increased employee protections.
The Employment Rights Bill, the first phase of the Labour Government’s plan to Make Work Pay, is currently at the House of Commons report stage. This Bill includes Day 1 employment rights, including entitlement to paternity leave and unpaid parental leave and protection from unfair dismissal. It will also make flexible working the default, and ban zero-hour contracts. Throughout 2025, the Government is also set to consult on several practices related to the Bill which won’t require primary legislation.
A separate survey of 941 employees revealed they expect their employers to act quickly to deliver the changes. More than half of employees (57%) would expect to see changes impact them within six months, suggesting businesses must be prepared to move swiftly. 18% of employees would expect to see immediate change.
Emilie Oldknow, CEO at Hanbury Strategy, said: “Employers are concerned about the impact of these forthcoming workers' rights changes, and employees rightly expect action quickly. With the legislation set to pass later this year, employers’ window to plan is narrowing: now is the time to fully understand the impact of the changes on individual businesses, and prepare internal communications to manage expectations and ensure employees understand what these changes mean for them.”
Hanbury’s team advising clients on the policy and employee engagement implications of the Government’s ‘Plan to Make Work Pay’ includes CEO Emilie Oldknow, former Assistant General Secretary at UNISON, and Fiona Stanton, Partner, and a former Labour Party Executive Director. It also includes Associate Director Fran Wilson who worked with the Labour Party in the run-up to the general election as an adviser on Labour’s employment reform policies, and Joe Moore, Director, who spent four years as a political adviser to the now-Deputy Prime Minister.
