This week, it will cost a business more to employ someone than it did last week, with increases to employer's National Insurance contributions and National Minimum Wage/National Living Wage. Also, on the horizon is the looming Employment Rights Bill, with day one unfair dismissal rights and a myriad of additional rights for employees and trade unions.

Many employers are steeling themselves in anticipation of the changes, and some are considering whether there are ways that their headcount numbers can be kept to a minimum whilst maintaining service levels. Last week, the Office for Budget Responsibility echoed these concerns, suggesting that the proposed changes will likely have “net negative economic impacts on employment, prices and productivity”. The government has itself indicated that the policies covered within the Employment Rights Bill are expected to impose a direct cost on businesses of up to £5bn annually.   

The right to claim unfair dismissal from day one of employment will mean that businesses will be much more cautious when it comes to recruitment decisions. For some, particularly in the hospitality industry, this will mean turning recruitment on its head. Whereas previously relatively snap recruitment decisions may have been made to fill gaps in the workforce in anticipation of, for example, a big event or seasonal demand, more care will need to be taken in those decisions. That, in turn, would mean more management time needing to be dedicated to recruitment, diverting from delivering the service itself and it could mean that businesses aren't able to increase their workforce quickly enough to react to unexpected spikes in demand.

The future of employment law over the next couple of years is certainly not going to be dull, but are we going to see unintended negative consequences which mean that, unfortunately, businesses choose less costly alternatives to having their current size of workforce?