Labour Market Report – June 2025

15/7/25

Labour Market Overview

The latest ONS Labour Market Overview shows that:

Data from Health and Safety Executive (HSE) Labour Force Survey show:

33.7 million working days lost in 2023/24 due to work-related ill health or non-fatal injuries
The leading causes were stress, depression or anxiety (16.4 million days) and musculoskeletal disorders (7.8 million days)
The average number of days lost per affected worker was 15.5, with an average of 1.25 days lost per worker, comparable to pre-pandemic levels

As part of Round 21 of the National Minimum Wage Naming Scheme, 518 employers have been publicly named for underpaying nearly 60,000 workers a total of £7.4 million. These underpayments relate to investigations concluded between 2015 and 2022. Offending businesses also faced financial penalties of up to 200% of their underpayment.

Employment Rights Bill

Members of the House of Lords have concluded the committee stage of the Employment Rights Bill, marking the end of eleven days of detailed, line-by-line scrutiny of one of the most wide-ranging employment reform bills in recent years. The legislation seeks to overhaul and expand key employment protections across the UK workforce.

The UK Government publishes timetable for implementation of the Employment Rights Bill. The government’s Employment Rights Bill roadmap sets out an indicative timetable for implementation of the majority of the 28 policy changes being introduced by the Employment Rights Bill.

Key changes for employers include:

April 2026:

Collective redundancy protective award – doubling the maximum period of the protective award to provide stronger financial security for workers facing mass redundancies.
‘Day one’ paternity leave and unpaid parental leave to support working families from the very start of employment.
Whistleblowing protections to encourage reporting of wrongdoing without fear of retaliation.
Fair work agency established to enforce labour rights and promote fairness in the workplace.
Statutory sick pay – removing the lower earnings limit and waiting period
A package of trade union measures including simplifying trade union recognition process and electronic and workplace balloting to strengthen democracy and participation in the workplace.

October 2026:

Ending unscrupulous fire and rehire practices to protect workers from being forced into worse terms under threat of dismissal.
Regulations to establish the fair pay agreement adult social care negotiating body in England to raise standards and pay in the social care sector.
Tightening tipping law – strengthen the law on tipping by mandating consultation with workers to ensure fairer tip allocation.
Requiring employers to take “all reasonable steps” to prevent sexual harassment of their employees to create safer, more respectful workplaces.
Introducing an obligation on employers not to permit the harassment of their employees by third parties to extend protections to all work environments, including public-facing roles.
A package of trade union measures including new rights and protections for trade union representatives, extending protections against detriments for taking industrial action and strengthening trade unions’ right of access.

2027:

Gender pay gap and menopause action plans (introduced on a voluntary basis in April 2026)to promote gender equality and support women’s health in the workplace.
Enhanced dismissal protections for pregnant women and new mothers to safeguard job security during pregnancy, maternity leave and a return-to-work period.
Further harassment protections, specifying reasonable steps which will help determine whether an employer has taken all reasonable steps to prevent sexual harassment to provide clearer guidance and stronger enforcement against harassment.
Creating a modern framework for industrial relations to build a fairer, more collaborative approach to workplace relations.
Bereavement leave to give workers time to grieve with job security.
Ending the exploitative use of zero hours contracts to provide workers with stable hours and predictable income.
‘Day 1’ right to protection from unfair dismissal to ensure all workers are treated fairly from the start of employment.
Improving access to flexible working to help people balance work with family, health, and other responsibilities.

Further additions to the Bill, announced July

Families who experience pregnancy loss before 24 weeks are set to become entitled to protected bereavement leave, under new amendments to the Employment Rights Bill announced on Monday 7^th July. These amendments form part of the biggest uplift to workers’ rights in a generation, set to benefit half of all UK workers. Hundreds of thousands of employees are impacted by pregnancy loss per year – one estimate for example suggests that there are around 250,000 pregnancy losses caused by miscarriages alone in the UK each year with a further 12,000 impacted by loss due to ectopic pregnancies. The measures announced will give those experiencing pregnancy loss at any stage the legal right to take time off work to grieve, giving them much needed support at a difficult time.

Employment Trends

The KPMG and REC, UK Report on Jobs: North of England has reported that permanent placements are down at the sharpest rate since March and has been the case since July 2023. Survey respondents noted that demand for staff remained sluggish, as subdued business sentiment had led to a reduction in vacancies and hiring freezes. The latest reduction was not only sharp, but the steepest seen over the second quarter. Billings received from the employment of temporary workers in the North of England also fell for the eighth month in a row in June.

June survey data signalled a decline in both permanent and temporary vacancies across the North of England for the eighth month in a row. The drop in permanent job openings was stronger than in May and solid overall, while the reduction in temp vacancies softened on the month and was only marginal.

The latest data from the survey revealed a further increase in permanent candidate numbers in the North of England, thereby extending the current period of growth to one-and-a-half years. The uplift reflected company restructuring efforts and greater redundancies, according to panellists. The seasonally adjusted Temporary Staff Availability Index remained above the critical 50.0 mark in June, to signal a sustained increase in temp staff availability across the North of England. The rate of growth was sharp and contrasted with the long-run trend of decline (49.6).

There was a marginal uplift in starting salaries reported in June, according to anecdotal evidence, the upturn reflected the filling of more senior roles and competition for skilled staff. The latest data for the North of England signalled a renewed decrease in average hourly rates of pay for short-term staff, thereby ending an 18-month period of growth.

Education, Skills and Training

In a letter to the joint Chief Executives, Education Secretary Bridget Phillipson confirmed that Skills England is now fully operational. Its strategic priorities are:

Identifying future skills needs
Simplifying access to training
Co-developing sector-specific solutions with industry Artificial Intelligence

Skills England’s review across 10 key growth sectors highlighted several challenges including apprenticeship standards being slow to adapt to change, delivery frameworks can be too rigid and SMEs face significant barriers accessing apprenticeship schemes.

Research from King’s College London found:

No widespread return to office trend in the UK
RTO (Return to Office) mandates face growing resistance, especially among women and parents
Mandates risk creating a two-tier workforce, potentially harming gender diversity, wellbeing, and talent retention

The Government has announced a major skills investment package to support young people and reduce reliance on migrant labour. Backed by a record £3 billion apprenticeship budget, the measures are designed to boost domestic skills in key sectors and include:

30,000 additional apprenticeship starts across this Parliament
45,000 extra training places, funded by an increase to the Immigration Skills Charge
Refocusing apprenticeship funding away from Level 7 programmes to lower levels from January 2026
Launch of 13 new Level 2 construction courses
£14 million of adult skills funding for construction devolved to local mayors
£136 million allocated to Skills Bootcamps in 2025/26
£100 million over four years to expand construction bootcamps
10 technical excellence colleges specialising in construction skills opening in September 2025

Thousands of young people across England will receive targeted support into work, under a new £45 million scheme launched by the Work and Pensions Secretary. The Youth Guarantee trailblazers will match young people to job or training opportunities and will provide all-important foundations for the national roll-out of the programme, ensuring all 18 to 21 year olds in England can access help to find work – breaking down barriers to opportunity as part of the Plan for Change. The eight youth trailblazers will be in: Liverpool, West Midlands, Tees Valley, East Midlands, West of England, and Cambridgeshire & Peterborough and two in London The trailblazers will play a key role in helping the government understand which local structures are most effective and in identifying the organisations best placed to deliver targeted support. They will also develop innovative ways to identify, engage and sustain contact with young people most at risk of falling out of education, employment or training.

GEM Partnership are launching a brand new apprenticeship launching on the 1^st August 2025 . This shorter more focused apprenticeship addressing the skills barriers that most advanced manufacturing businesses are facing is going to be a very popular offering to upskill your entry level workforce and recruiting talent into or upskill within the business. To help support attracting and retaining talent, the government are offering employer incentives of up to £3000 to the end employer:

To take on a 16 – 18 years apprentices employers receive a £1000 incentive paid at £500 at 90 days and 242 days if the apprentice is still on programme
Additional employer recruit and retain incentive of £2000 per foundation apprentice, paid in 3 instalments of £667 at 90 days, £667 at 242 days and £666 payable if the apprentice starts a new apprenticeship within 6 months of their completion date and remains with the same employer.

The benefits of recruiting an apprentice:

Succession planning
Building a talent pool for the future
Addressing skills shortages
Boost productivity
Innovative and fresh perspectives

Information about Apprenticeships

Foundation apprenticeships are employed positions and are for younger people age 16 to 21 who will benefit from a wide range of experiences. Each foundation occupation provides a mix of employability skills and behaviours, technical knowledge and skills, and associated English and maths. It combines valuable hands-on practice in the workplace with off-the-job learning. Completion of this foundation apprenticeship will certify competency in all of the technical knowledge and skills, together with all of the employability skills and behaviours described. The typical progression routes will likely include employment or progression onto another skills product such as a level 2 or level 3 apprenticeship. Foundation apprenticeships benefit employers as they get to see the apprentice in work-based settings while the apprentice receives extra support. Employers also benefit from accessing a broader talent pool of young learners than they might otherwise do generating new talent for the future.

Overview of the role

General engineering and manufacturing operatives are found in environments supporting, for example, production, maintenance, assembly of components and systems, machining operations, fabrication and welding and additive manufacturing functions. They may work across many sectors including automotive, aerospace, energy, advanced and general manufacturing. The apprentice will carry out general engineering and manufacturing tasks consistently using safe working practices, planning and organising resources, and completing tasks within timeframes.

The Apprenticeship is delivered over a 8 month period.

Level: 2
Typical duration to gateway: 8 months
Maximum funding: £4,500 paid via the apprenticeship levy
OTJ hours – 187, roughly 6 hours per week

If you would like any more information about this new and exciting apprenticeship, please contact Kelly.lee@gempartnership.com

Commentary

Maria Miller – Operations Director (Maria.Miller@gempartnership.com)

GEM are looking forward to working with our clients advising on all forthcoming changes initiated from the Employment Rights Bill and associated policy changes, impacting our industry sector. As a training provider we are also working with all relevant governing bodies to stay at the forefront of changes by Skills England. GEM hold direct funding and are able to support with a range of upskilling and staff development programmes to aid your workforce development.

I would welcome the opportunity to discuss the changing landscape with you and outline the support and programmes we offer that can enhance your People plans.

References

https://www.ons.gov.uk/employmentandlabourmarket/peoplenotinwork/unemployment

https://www.gov.uk/government/news/over-74-million-put-back-in-working-peoples-pockets-by-employers

https://www.gov.uk/government/news/roadmap-unveiled-to-boost-rights-for-half-of-all-uk-workers-and-provide-certainty-to-employers

https://assets.publishing.service.gov.uk/media/686507a33b77477f9da0726e/implementing-the-employment-rights-bill-roadmap.pdf

https://kpmg.com/uk/en/media/press-releases/2025/06/kpmg-and-rec-uk-report-on-jobs.html

https://assets.publishing.service.gov.uk/media/6863f18b3464d9c0ad609ddf/Skills_England_-_sector_evidence_on_the_growth_and_skills_offer.pdf

https://www.gov.uk/government/news/next-generation-of-builders-and-carers-set-to-rebuild-britain#:~:text=Young%20people%20are%20set%20to,the%20workforce%20to%20rebuild%20Britain.

https://www.gov.uk/government/news/thousands-of-young-people-set-to-benefit-from-new-support-into-work-and-training

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