Get set for employees and unions to be granted stronger rights

This growth underlines the sector’s importance to Scotland’s export profile, and employment across both urban centres and rural communities. Significantly, growth has been achieved despite rising costs pressures, lack of investment in skills and knowledge and as employers grapple with an increasingly complex and demanding employment law landscape in the shape of the Employment Rights Act 2025 (ERA 2025).

Rising energy costs, non‑domestic rates, volatile consumer demand and over‑production continue to challenge margins. Premium drinks producers, particularly whisky distillers, also face sustained pressure from tariffs and international trade friction. These challenges are forcing many businesses to reassess staffing levels, work patterns and long‑term workforce models.

Yet they must be careful to ensure any plans fall within the raft of new ERA 2025 employment laws, intended to strengthen individual employee and trade union rights to improve predictability at work. New rules include enhanced unfair dismissal protection, tighter constraints on “fire and rehire” practices, expanded rights of employees to predictable working patterns, and strengthened redundancy consultation obligations.

Two aspects are particularly salient for food and drink manufacturers. First, complex new rules are planned to give agency workers the right to more predictable work patterns, obliging companies to offer agency workers permanent direct contracts if certain conditions are met. Many larger (and some smaller) F&D manufacturers rely on such workers to deal with peaks of demand. Clearly, the increased risk of being compelled to offer permanent contracts (and managing the administrative necessity of maintaining records to ensure legal compliance) is an additional burden.

The lowering (from two years to six months) of the qualifying period for bringing unfair dismissal claims will also have a disproportionate impact on smaller to medium sized businesses (SMEs). They are less likely to have the administrative resources to ensure worker performance and conduct are managed early in the recruitment onboarding process. This is crucial for such employers, for a failure to identify and let go of unsatisfactory workers before their six-month probationary period is up means it’s subsequently more onerous and expensive to pursue dismissal. The result? Some businesses face either significantly increased worker claims or decide to halt recruitment!

The new ERA 2025 regime also reinforces the need for businesses to conduct more deliberate long‑term workforce planning. New rights to predictable working patterns, a shortened qualifying period for unfair dismissal claims, and stronger enforcement through the Fair Work Agency, mean employers must think carefully about how work is organised and resourced. Flexible working arrangements, skills development and retention strategies are no longer simply matters of good practice; they are increasingly essential for legal compliance and sustainable growth.

Scotland’s food and drink industry is a success story but for the sector to enjoy long-term sustainability, employers must engage early with the new employment framework. It’s now imperative to avoid short‑term labour decisions that may inadvertently hamper recovery, and to redouble the focus on skills development. Growth figures grab the headlines, but it’s people, and the legal frameworks that protect them, who will ultimately shape the future.

Michael McLaughlin is an employment partner, Shoosmiths