Pay & employment
Introduction
A flexible labour market is critical so employers can continue to deliver good pay and conditions for employees while continuing to boost employment prospects. This section covers the Government’s plan to Make Work Pay and updates on the National Minimum and Living Wage rates.
Make Work Pay is a flagship plan of the Labour Government focusing on reforming the current employment rights landscape. The Employment Rights Bill (ERB) and the Equality (Race and Disability) Bill are two of the key means of delivering the Make Work Pay plan – please see below for more details.
Employment Rights Act (ERA)
Proposed changes from the government that are under review:
- Establishment of the Fair Work Agency (FWA)
- Industrial Relations
- Collective Redundancy
- Zero Hours Contracts
- Ethnicity and Disability Pay Gap Reporting
- National Living Wage
For members: find full details of the FDF’s positions on the Employment Rights Act here.
Further information
National Minimum and Living Wage (NMLW)
National Minimum and Living Wage (NMLW)
National Living Wage (NLW) and National Minimum Wage (NMW) rates remain important considerations for FDF, given their impact on competitiveness, investment, and employment across the UK food and drink manufacturing sector. As the UK's largest manufacturing industry, employing almost half a million people directly, food and drink manufacturers continue to face significant cost pressures from both domestic and global factors.
FDF responded to the 2026 Low Pay Commission (LPC) consultation. Our key positions include:
- Broad support for the LPC's central estimate of a 3.7% increase in the National Living Wage to £13.18 from April 2027, in line with the Government's objective of maintaining the NLW at two-thirds of median earnings.
- A call for the LPC to retain flexibility when setting future rates and respond to changing economic conditions, particularly as manufacturers face rising costs associated with energy, fuel, shipping, packaging, and increasing regulatory burdens.
- Continued support for a cautious and evidence-based approach to increases in youth and apprentice wage rates. While FDF supports the long-term ambition of aligning the 18-20 Year Old Rate with the NLW, further progress should be dependent on clear evidence that employers can absorb additional costs without negatively impacting recruitment, training, and progression opportunities.
- Recognition that apprentice rate increases should strike an appropriate balance between fair pay and maintaining employer participation in apprenticeship programmes, which are critical to addressing skills shortages, supporting productivity, and driving growth across the sector.
Updated NLW central estimate: £13.18 (3.7%) with an expected indicative range between £13.02 (low) and £13.34 (high) – maintaining the Government's target of two-thirds of median earnings, subject to economic conditions and the LPC's final recommendations.
Equalities Disabilities and Race Bill – Mandatory Pay Reporting
FDF have responded to the government’s consultation looking at mandatory ethnicity and disability pay gap reporting for large, private and voluntary sector employers in England, Wales and Scotland. FDF’s key positions include:
- Support the intention behind the proposals and what it seeks to achieve
- However, existing challenges in data collection and interpretation need to be addressed.
- Recommend government delay the mandatory disability pay gap reporting pending further review of data collection and outcomes.
Members: Members can find full details of the FDF’s positions on the Equalities Disabilities and Race Bill here.
