As we start the new year, we asked our team to choose key policy areas to look out for in the world of work and the labour market in 2025.

Can Labour turn all of their promises on employment reform into a reality?

George Williams, Research and Policy Analyst

Within its first 100 days, the Government published its flagship employment legislation, the Employment Rights Bill. However, the Bill did include all of its manifesto commitments on reforming the labour market. The Government subsequently set out how it intends to deliver these commitments in its Next Steps to Make Work Play. Including holding a review of carers and parental leave and consulting on single ‘worker’ status.

Turning this plan into a reality could prove difficult. Not only are these measures financially costly or logistical complex. The fact they have not been included in the Governments initial flourish of legislation, leaves them more susceptible to pressure from business interests looking to water them down. How Labour chooses to respond to these challenges over the next 12 months will be a true sign of how committed they are to delivering bold employment reform.

Will a ‘right to switch off’ statutory Code of Practice be strong enough for workers?

Emelia Williams, Research and Policy Analyst

Labour announced in their Manifesto that they would give workers the ‘right to switch off’ from work outside of their contracted hours in order to have a more positive work-life balance – however, this promise did not make its way into the Employment Rights Bill. Rather the Government intends to introduce a statutory Code of Practice, which is essentially guidance for employers and workers.

In order for the proposed ‘right to switch off’ to work properly, organisations need to foster a supportive organisational culture. The existence of a standalone policy – or guidance – is never enough. Employees need to actually feel that they can disconnect from work outside of core work hours or whilst on leave without being penalised for it. In 2025, I would like to see employers focussing on their organisational culture as well as their policies.

How will the Government reform the health and disability benefits system?

Aman Navani, Research and Policy Analyst

The Government has pledged to reform the health and disability benefits system and intends to set out some of its proposals in a Green paper next spring. The case for change is strong. Too many people are locked out of employment support while the assessment system is complicated and stressful to navigate. However, any fundamental reform should not lead to more claimants being subject to the threat of sanctions which often pushes them into insecure work. The Chancellor has also committed to cutting the disability benefits bill by £3 billion which risks worsening the financial insecurity too many claimants already face. The best way to bring down the benefits bill and “Get Britain Working” again is to supporting people into secure and sustainable employment.

Will the Fair Work Agency have enough power and resource to make working lives better?

Jon Fitzmaurice, Head of External Engagement

UK labour market enforcement is fragmented and under resourced. Over 370,000 workers were underpaid the National Minimum Wage in 2024 and previous research has found UK employers were likely to be inspected once every 500 years on average.

At the heart of the Government’s Employment Rights Bill is a pledge for a new Fair Work Agency, which promises to be a critical step in ensuring workers’ rights are adhered to by all employers.

However, we need more detail on whether there will be more funding for enforcement to give the new agency the capabilities to enforce new employment regulations effectively.

How will the Government work with employers to achieve its goals?

Asli Atay, Senior Policy Advisor

As the UK continues to grapple with labour market challenges, the relationship between employers and the government will be crucial in 2025. Can the government effectively persuade employers that addressing economic inactivity and improving job quality is not just a social responsibility but also a smart business move? Achieving ambitious targets, such as reducing economic inactivity and reaching an 80% employment participation rate, will depend on genuine collaboration. Employers must take a proactive role in providing secure, flexible, and high-quality jobs. Smaller businesses, in particular, may require additional support, but meaningful progress will undoubtedly depend on a strong partnership between employers and the government.

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The opinions expressed by our bloggers and those providing comments are personal, and may not necessarily reflect the opinions of Lancaster University. Responsibility for the accuracy of any of the information contained within blog posts belongs to the blogger.