Broad Shoulders Required for Enhanced Employment Rights

Having recently concluded this year’s round of employment talks with growers, we have had multiple opportunities to reflect on why anyone would wish to employ people, let alone in horticulture – an industry that still relies so heavily on labour.

We are not economists but, if our government really wants UK plc to be the fastest growing economy in the G7, we have to question why they are:

• raising taxes on employing staff?
• raising wages for staff at over three times inflation?; and
• making it more burdensome to hire staff?

However, that appears to be the agenda and – with the hotly anticipated Employment Rights Bill published within the first hundred days of the new Labour Parliament, followed, but three weeks later, by the budget heralding at its centre piece a £25 billion increase in Employer’s NI – it is absolutely clear that those with significant numbers of employees are going to have to absorb huge increases in employment costs over the next 12 months.

So, what have they done?

National Insurance – The real hit from the rise in employers’ NI was not so much the increase in NI contributions by 1.2% to 15% from 6 April 2025, but – in reality – the cut in threshold from £9,100 to £5,000. The practical impact of this is huge; meaning that an employee earning only £9,100 will now cost the employer just over £600 more. Multiply that up for a farm that employs a thousand seasonal workers for their season, add their permanent worker bill and we are finding some of our bigger farms looking at an increase in NI of around £1 million.

Minimum wage – The Chancellor also announced a 6.7% wage increase for those on minimum wage and aged 21 and over to £12.21 an hour; with vast increases (16.3% for those in the 18 to 20 year bracket) and 18% for 16 – 17 year-olds and apprentices also taking effect from the beginning of April.
Employment burden – The language of the Employment Rights Bill which mostly comes into force in 2026 …. “make work pay”; “ban exploitative zero hours contracts”; “make work safe” is laudable at first glance. However, it ignores the huge cost and administrative burden that goes with it. Of course, all employers want to make the workplace safer, but:

• what in practice does an employer need to show to prove that he or she has taken “… ALL reasonable steps to prevent sexual harassment in the workplace …”?;
• what proportion of zero hours contracts are genuinely exploitative?
• is it really in the interests of a progressive economy to give employees so many new employment rights applicable from day one of their employment, including: rights to statutory sick pay (no three-day “waiting period”) and statutory maternity pay (not just leave); and the right not to be “unfairly dismissed”?

Not just once was I asked “why be an employer”?; and these meetings were concentrating on employment rights – so (perhaps thankfully) – we did not discuss the impact of the drastic changes to agricultural and business inheritance tax reliefs which of course seriously disincentivise business owners from adding value to their businesses!