Earlier this month, more than 100 Hut pizza delivery drivers for the largest franchisee to take away in Scotland were called to an emergency meeting and offered an imported choice.
Glenshire Group managers, which manages delivery points across Scotland, said workers They had the choice: Take an effective salary reduction, move on to a role in store or go to independent work.
Changes, according to the bosses, were necessary to deal with the increase in national insurance contributions (NIC) and minimum wage rates that come into force this week – strongly increasing labor costs for low -wage workers employers.
Bryan Simpson, senior hospital organizer at the Union UniteWho relayed the details of the exchange of the Glenshire, said that the changes have created a “dangerous precedent” in a sector where many employers move workers to shorter or zero hour contracts to reduce costs.
“It is not a small business-it is the largest franchisee in all fast food (in Scotland) that moves to an independent model,” he said. “It really worries me about the message he could send to the rest of the sector.”
The Glenshire said that he had not changed the contractual conditions of workers and “joined our colleagues directly to understand their concerns”.
But the line reflects the pressures that employers through the United Kingdom deal in a context of low growth and consumption expenditure.
Salary bills have been increasing rapidly for several years. But from next week, employers face a double problem. On April 1, the minimum wage for adults will increase by 6.7%, while rates for young workers jump to this rate more than twice. From April 6, employers will pay a higher rate of NIC for all employees earning more than £ 5,000 per year – half of the current threshold.
When Chancellor Rachel Reeves announced the increase in NICS in her October budget, the Office for Budget Responsibility said that most of the costs would be borne by workers thanks to slower wages and at higher prices, while the equivalent of 50,000 jobs would be lost by fewer roles or shorter hours.
But the tax guard dog did not examine the combined effect of the tax and increases in the minimum wage. He admitted last week that the increase in taxes could achieve jobs more than what it was initially expected, because it most strongly increased costs in the low -wage sectors where employers must continue to increase remuneration, both to correspond to the legal minimum and to motivate the staff above the scale.
Analysis by the Foundation resolution shows how uneven the impact will be.
Although the combined changes of next week will add 3.4% to the average labor costs, the increase will be 6.6% for the 10% of the smallest employees, according to the calculations of the reflection group. It will only be 1.7% for 10% higher.
There will be a particularly brutal change for part -time workers, said the reflection group. While labor costs will increase by 10.2% for a full-time adult winning the minimum wage, they will increase by 14.2% for a part-time worker earning £ 10,000 per year on the same hourly rate. This worker would have previously fallen below the Nics threshold.
Nye Cominetti, principal economist of the Resolution Foundation, estimated that this would lead to a drop in employment equivalent to the loss of 85,000 employees, concentrated among the least paid. It has expected a drop in employment of 0.7% in the lower decile of wage distribution.
“This is a large number … which would have been smaller if the policy had been better coordinated,” Cominetti told Financial Times.
The data published last week by the Office For National Statistics, on the basis of commercial surveys, showed that the number of jobs in hospitality has dropped by 1% between September and December 2024, while retail jobs dropped by 0.2% in the quarter and 1.2% over the year.
Sainsbury's and Morrisons are among the major retailers who have announced new job cuts since the beginning of 2025, closing cafes and food meters to help contain cost increases.
Elsewhere, significant increases in basic remuneration have reached a loss of other advantages. Tesco, who will retain his hourly rate for store staff above the new minimum wage, although by a smaller margin than before, will make the payments of Sunday bonuses heard.
There is also evidence of the increase in costs that retains hiring on the wider labor market. However, the impact was not as bad as some dark commercial surveys initially suggest this, the use of payable payable from the budget and the latest in real time showing a rebound in online advertising publications in February.
James Hilton, financial director of recruiter Hays, said that he saw a number of companies setting up a certain number of temporary companies after the budget, as well as other cost reduction measures. The typical New Year's collection had materialized, he said, but employers still dragged the interview process and “sky the decision”.
But Helen Dickinson, director general of the British Retail Consortium, warned that there was a risk that the changes in policy will bounce on low -wage workers, which makes retailers less ready to offer flexible and part -time hours or to risk less productive and younger hires.
This would undermine the government's legislative will to Strengthen workers' rights And her hopes of helping sick and disabled benefits, applicants, working seekers, she argued.
“Does the government think of how all these different policies assemble? You want to put these people at work … You don't want to make it more difficult. ”
Visualization of data by Amy Borrett
