DWF: Scottish labour market cooling but not cracking
DWF employment expert Ann Frances Cooney says Scotland's labour market is cooling as new trade union access rights approach, according to Edinburgh Chamber of Commerce.
Ann Frances Cooney, employment expert and partner at DWF, has commented on the latest labour market figures in Scotland, Edinburgh Chamber of Commerce reported.
Cooney said the figures for June to August 2026 show that over the year the unemployment rate increased while economic inactivity and employment rates decreased. She said: “The latest labour market figures for June to August 2026 indicate over the year, the unemployment rate increased and the economic inactivity and employment rates decreased. Taken together, the figures point to a labour market that is cooling, but not cracking.”
According to Cooney, Scotland’s employment rate was estimated at 74%, down 0.4% over the year, compared with a UK rate of 75.3%. She said Scotland’s unemployment rate was estimated at 4.3%, up 0.6% over the year, which remained below the UK rate of 4.7%. Cooney said the latest data paints a more encouraging picture than earlier in the year, with Scotland maintaining lower unemployment than the UK as a whole, even though challenges remain in closing the gap on employment levels.
Cooney cited early seasonally adjusted estimates for September 2026 from HMRC Pay As You Earn Real Time Information, which indicate that median monthly pay for payrolled employees in Scotland was £2,698, a 4% increase in nominal terms compared with September 2025. She described the continued rise in earnings as a positive sign for workers and the wider economy, while noting that employers will remain focused on managing higher employment costs and maintaining sustainable growth.
Looking ahead, Cooney said employers in Scotland are approaching a pivotal moment in workplace relations, with new trade union access rights coming into force on 30 October 2026. She described this as one of the most significant shifts in industrial relations for a generation, creating new opportunities for unions to engage with workers and recruit members directly in the workplace. Cooney said these changes will not be confined to traditionally unionised sectors, and employers with little or no history of trade union engagement may also need to adapt. She said organisations are increasingly recognising that industrial relations strategy must form part of wider people and business planning, with proactive employee engagement, effective workplace communication and a clear workforce strategy likely to become critical differentiators.