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Bolton-based Seddon Construction – the construction and development services business serving the North West and Midlands – has survived two World Wars, numerous political and economic crises, house-building slumps, and more recently Covid-19. But this April, the business, which currently employs around 600 people, potentially faces its greatest challenge yet.
April 6th sees the arrival of the first of a series of reforms to be introduced by the Employment Rights Act. Immediate changes are new day-one rights to statutory sick pay, as well as changes to paternity leave, unpaid paternity leave, and flexibility around taking paternity leave (previously requiring 26 weeks’ service).
To a large extent, these are changes that many in the construction sector have hailed. Experts agree the scourge of workers arriving on site when ill (and then working badly or unsafely), just to stay earning, will finally end. Research by QBE reveals 22% of construction workers have suffered an injury at work due to working while ill, with 76% saying working while suffering poor mental health increases risk of injury. But it’s as Seddon prepares for the rest of the reforms sluicegate to open (including enhanced unfair dismissal rights that come in on 1st January 2027, but effectively apply to anyone employed from June this year), that spells an unsettled period ahead as bosses there try to work out how they navigate the next 12-months.
In an exclusive interview with Seddon’s CEO Nicola Hodkinson and Head of HR, Craig Carney, HR Grapevine sought to gain an insight into exactly what issues this particular business faces and what hurdles similar organisations will also need to navigate. And the overriding sentiment is uncertainty.
We commit to staff, but it’s getting harder
Nicola Hodkinson
CEO, Seddon
“Although we’re an employer committed to our people – for instance we pay the national living wage – this Act could well have a serious and detrimental impact on employers actually wanting to employ people,” says Carney. Adds Hodkinson: “Construction firms will simply prefer to use contractors, to potentially avoid some of these new protections.”
In construction particularly, where projects come and go, and staff numbers are ramped up and down according to work pipelines, the self-employed route has become de rigueur, and a preferred way of hiring.
Hodkinson, however, who also chairs leading UK charity, Mates In Mind, and accepts that the self-employed route creates “poorer mental health outcomes,” has long-tried to push back on this, preferring to employ people directly. In fact, 50% of its turnover came from those who are directly employed – a real outlier in the construction space. But now, she admits the provisions of the act could test this.
“We operate to a family charter that states we’re expected to continue to directly employ people,” says Hodkinson. “But last year, we already couldn’t make good on an ambition to increase our direct employees by 10% because of the NI rises.” She adds: “Before the 2008 crash, about one third of all construction sector workers were contractor/self-employed workers. Now it’s more like two-thirds. We’d like to get back to that previous ratio, and we only aim to bring contractors in when there is a bumpier pipeline of work. But the new requirements of the Act ‘will’ make it more desirable to have contractors.”
Although we’re an employer committed to our people – for instance we pay the national living wage – this Act could well have a serious and detrimental impact on employers actually wanting to employ people
Both Hodkinson and Carney say they ‘don’t’ want to be one of those employers who takes a short-term view – because in every way they can, they say they go out of their way to be a better than average employer in this sector.
Craig Carney
Head of HR, Seddon
“We’re a Disability Confident employer; we’re a signatory to the Armed Forces Covenant; we’re part of the Salford City Mayor’s Employment Standards Charter and a member of Liverpool City Region’s Fair Employment Charter,” says Carney. “As a business this means we always want to take a long-term view, and we have much lower turnover of our people as a result. But the new changes are very hard to apply well to a sector likes ours. For instance, I’m right now trying to work out what we do with – say a project manager – who we’ve had for eight months – but who will soon have unfair dismissal rights, even though the project was known to be project-based, and short-term.” He adds: “Do we move him to a different part of the business – but what if that’s a different role, on less pay? Do the new fire and rehire protections kick-in?” He continues: “Then it’s what role do the trade unions play?” [The Act establishes a Fair Pay Agreement process, which is expected to extend to construction. This means employers may have to engage in negotiations to agree on binding pay terms.]
