Business secretary Kemi Badenoch has also announced a focus on employment-related policy, including the Working Time Regulations.

Regulation around how people are employed, and successive case law judgements relating to that regulation, have had a major impact on recruiters’ ability to place people with clients in a timely and consistent way, says the Recruitment & Employment Confederation (REC).

In a letter sent to Badenoch, the Secretary of State for the Department for Business and Trade, last week, the REC was supportive of the Secretary of State’s updated policy. But the REC has also urged Badenoch to make every effort to “consult quickly, widely and effectively with business”.

In the letter, Kate Shoesmith, REC deputy CEO, said: “The clarity over the timeline for the Retained EU Law Bill (REUL) that this brings to employers and workers alike is crucial and as you [Badenoch] rightly state, the government now needs to work with business to introduce new UK specific legislation that balances regulation with the ability for businesses to grow. A vital component of this growth relates to employment strategies.

“As a first step, it was good to see that Working Time is in focus for the government. Introduced in 1998, Working Time Regulations came into being in a vastly different labour market and successive case law judgements have sometimes impeded our ability in industry to navigate and translate the regulations into workable practice. Rolled-up holiday pay is just one area where we need clarity. Likewise, any changes to the regulation here needs to sit alongside guidance that ensures individuals continue to take rest breaks, and that they are encouraged to take suitable annual leave.”

Shoesmith said the REC had written to offer their “industry insight and expertise” to make future regulation of the labour market effective. She added: “REC member voices matter because they place more than a million temporary agency workers, contractors and freelancers out on assignment on any given day and source a million people for new permanent jobs every year.”

The announcement from Badenoch comes as many businesses are at a tipping point, not just in terms of post-Covid resilience but also on dealing with worker shortages in general, Shoesmith said, with the UK economy standing to lose up to £39bn in GDP every year from 2024 unless business and governments act on labour shortages.

“There were some very specific proposals from the business secretary around introducing rolled-up holiday pay and non-compete clauses, and the REC will be consulting widely with our membership to understand their views on this to inform our upcoming conversations with government officials,” Shoesmith said.

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