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DWF employment team comments on latest labour market data

12 October 2022

Our employment law experts across the UK comment on the latest labour market figures for the UK, Scotland and Northern Ireland.

UK wide data

Joanne Frew, Interim Global Head of Employment & Pensions at DWF, comments on the UK wide ONS labour market figures published today. She said: "The latest ONS labour market figures remain stable as the UK continues to battle with the cost of living crisis.  

The highlights of the period between June and August 2022 show an employment rate of 75.5%, 0.3% lower than the previous quarter.  The UK unemployment rate was estimated at 3.5%, 0.3% lower than the previous quarter and the lowest rate since 1974.  It is worth noting that the previous quarter (March to May 2022) had a notably higher employment rate than other recent periods meaning that the employment rate drop appears more significant.  

The number of job vacancies in July to September 2022 was 1,246,000 a reduction of 46,000 from April to June 2022.  Vacancies fell by 3.6% in July to September and is the third consecutive fall.  

"Although the so called "Great Resignation" remains an issue for many employers, these figures indicate that the labour market is starting to slow down after a particularly volatile period.  
"It will be interesting to see what impact the change of government may have on the labour market. With all EU-derived employment law under review following publication of the Retained EU Law (Revocation and Reform) Bill and suggestions that the Government may be considering introducing "no fault dismissals" for higher earners, many employees may feel more hesitant to move jobs until it is clear what impact the new bill may have on workers' rights.  

"The ONS figures show a fall in regular pay by 2.9% for the period between June and August 2022.  With the cost of living crisis biting, employers will need to consider new and innovative ways to help support their workforce during this difficult period – from increased flexibility to help reduce  childcare costs to one off bonuses (where financially possible) to help with rising costs."  

Scotland

Ann Frances Cooney, partner leading the Scottish employment law practice at DWF, comments on the Scottish labour market data. She said: "The latest labour market figures for Scotland show continued improvement with the unemployment rate decreased, the employment rate increased and the economic inactivity rate decreased.  

"The headline figures for the period between June and August 2022 show an estimated employment rate of 75.8%, an increase of 0.4% over the quarter.  By way of comparison Scotland's estimated employment rate was above the UK rate of 75.5%.  Scotland's unemployment rate was 3.3%, 0.3% lower than the previous quarter. Scotland's unemployment rate was below the UK rate of 3.5%.  

"The Scottish labour market has remained resilient during a challenging period. As we look ahead, labour supply is likely to continue to be a concern for many employers in Scotland with the combination of the cost of living crisis and the so called "Great Resignation".  

"We have seen much movement in the job market as employees quite simply need more money to live. It will be interesting to see what impact the change of government may have on the labour market in Scotland. With EU-derived employment law all under review with the Retained EU Law (Revocation and Reform) Bill published; many employees may feel more hesitant to move jobs until it is clear what impact the new bill may have on workers' rights." 

Northern Ireland

Marie Claire Logue, associate in the Employment team in the Belfast office of DWF comments on the NI Labour Market report. She said: "September was off to a frosty start for the labour market in Northern Ireland after seeing some improvements over the summer, with the first monthly decrease of 0.1% of employees receiving pay through HMRC PAYE. 

"There were 190 redundancies proposed in September (with 150 occurring), following no, or low, redundancies throughout July and August, and a monthly average of 60 people made redundant throughout 2022. 

"September has also seen the first monthly decrease in payrolled earnings and the largest decrease in monthly earnings in over a year (since August 2021). Earnings from the HMRC PAYE show that NI employees had a median monthly pay of £1,944 in September 2022, which amounts to a decrease of £31 over the month.

"However, whilst the figures point to a worsening labour market in the short term, the latest HMRC payroll data showed that payrolled employee numbers are now 3.8% above those recorded in March 2020 (pre-Covid) and 2.6% higher than September 2021. Payroll earnings are now 11.4% above pre-COVID level, however, this is the lowest increase of all 12 UK regions.  

"Over the month of September 2022, the NI claimant count increased by 1.3% to 35,900, which was the first increase since February 2021. The NI seasonally adjusted claimant count was 35,900 (3.8% of the workforce) in September 2022, representing the fifth consecutive month that the claimant count rate has remained at 3.8%.

"Over the last 15 years, the NI employment rate has been consistently below the UK rate. This remains the case, with the NI employment rate 5.6% less than the overall UK rate of 75.5%  (June – August 2022). The latest labour market statistics have shown an increase by 3.7% in the male employment rate throughout the year, with a decrease of 1.8% in female employees.  

"It is interesting to note that the figures show that the number of weekly hours worked in June-August 2022 have not returned to pre-pandemic levels, with the figures sitting at 2.0 million hours, or 7.0%, below the pre-pandemic (December-February 2020) figures. 

"Looking further into the winter months, workforce retention could continue to be a problem for employers. The ONS figures show a fall of 1.6% in monthly pay over the month of September, and as the cost of living crisis continues, employers will need to consider supportive strategies to help assist their workforce during this difficult period – which could include offering increased flexibility, one off bonuses (where financially possible) or assistance towards childcare - to help with the rising costs."

Further Reading