The Labour party is set to introduce new rules requiring companies to offer zero-hours staff a regular contract after three months.
This move is part of a wider reform initiative to address ‘one-sided flexibility’ in the workplace, a term used to describe the exploitative employment practices that have become increasingly common.
The Proposal
Deputy Prime Minister Angela Rayner and Business Secretary Jonathan Reynolds have informed business leaders and unions that new legislation could compel employers to offer zero-hours staff a regular contract with guaranteed hours after 12 weeks.
This proposal follows the example set by McDonald’s in 2017, which gave staff the option to switch to contracts with minimum guaranteed hours. Although most employees chose to remain on flexible terms, the initiative has been cited as a model for balancing worker protections with business needs.
Union and Business Reactions
Opinions were split among business leaders and union representatives during discussions. Some business leaders argued for a longer qualifying period, while union representatives advocated for a shorter timeframe.
A Whitehall insider explained that the three-month proposal aims to prompt clearer responses from businesses, with further details to be developed later.
A Wider Push for Reform
Labour has pledged to clamp down on ‘one-sided flexibility’ in the workplace.
Proposals include requiring employers to compensate staff for late-notice shift cancellations and preventing workers from being financially disadvantaged when shifts are cancelled at the last minute.
While Labour initially considered a full ban on zero-hours contracts, they have backed away from this due to resistance from businesses, particularly in the hospitality and leisure sectors. These businesses argue that the contracts offer valuable flexibility for both workers and employers.
Potential Economic Impact
Business leaders have raised concerns about the potential costs of these reforms. The Confederation of British Industry (CBI) reported that only 26 per cent of businesses feel confident they can absorb the financial impact without harming growth, investment, or jobs.
Tensions have also emerged within the Government on handling probation periods. Rayner is pushing for full employment rights from day one after a short probation, while Reynolds reportedly favours a longer probation period, potentially up to nine months.
Employment Rights Bill
The Government’s flagship employment rights bill is expected to be unveiled in the coming weeks. Ministers are working to reconcile business concerns with their commitment to improving worker protections.
This bill is part of Labour’s promise to deliver the largest overhaul of workers’ rights in decades.
Details are still being finalised, and further discussions are expected as the bill is prepared for its official unveiling.
Examples from the Past
The three-month threshold proposal, inspired by McDonald’s 2017 initiative, is seen as a middle ground. It balances the need for worker protections with the flexibility businesses seek.
While McDonald’s found most of their employees preferred to stay on flexible terms, the option for guaranteed hours provided a safety net that could be crucial in various other sectors.
Looking Ahead
As Labour finalises the details of the employment rights bill, the focus remains on ensuring that the proposed reforms are both effective and fair.
Employers and employees alike are keenly awaiting the finalised version to understand how it will impact their working conditions and business operations.
Labour’s proposed crackdown on zero-hours contracts signals a significant shift in UK employment policy.
As the details unfold, both businesses and employees will be watching closely to see how these changes will be implemented and their potential impact on the labour market.
