Labour is preparing to introduce significant reforms aimed at zero-hours contracts, offering more stability to workers.
- Deputy Prime Minister Angela Rayner and Business Secretary Jonathan Reynolds propose legislation to guarantee hours after three months.
- These reforms are part of a broader initiative to address ‘exploitative’ employment practices.
- Opinions differ among business leaders and unions on the ideal qualifying period for these new rules.
- Labour scales back full bans on zero-hours contracts, following concerns from the hospitality and leisure sectors.
In a move towards enhancing worker stability, Labour is poised to implement new legislation requiring companies to offer a regular contract with guaranteed hours to zero-hours staff after three months. This proposal was communicated to business leaders and unions by Deputy Prime Minister Angela Rayner and Business Secretary Jonathan Reynolds in a private meeting. The legislation is part of Labour’s broader efforts to overhaul ‘exploitative’ employment practices, although the finer details of the bill are still under development and expected to be unveiled next month.
The three-month qualification period for switching to a regular contract is inspired by a 2017 initiative by McDonald’s, which provided employees the option to shift to contracts with minimum guaranteed hours. This model has since been highlighted for achieving a balance between worker protection and business flexibility. However, opinions diverge on the appropriate timeframe for this transition. Some business leaders advocate for a longer qualifying period, while union representatives push for a shorter duration. A source within Whitehall mentioned that the three-month period is intended to elicit clearer business responses, with further specifics to be ironed out subsequently.
Despite earlier considerations for a complete ban on zero-hours contracts, Labour has adjusted its stance due to opposition from the business community, particularly in sectors like hospitality and leisure. These sectors argue that such contracts offer necessary flexibility for both employers and employees. Labour’s revised approach still aims to curb ‘one-sided flexibility’ by mandating employer compensation for late-notice shift cancellations, thus protecting workers from financial disadvantages when shifts are suddenly dropped. This debate forms part of Labour’s strategy to introduce the most comprehensive overhaul of workers’ rights in decades.
The Confederation of British Industry (CBI) has expressed concerns regarding the financial implications of the proposed reforms, fearing adverse effects on growth, investment, and employment. Currently, only 26 per cent of businesses feel capable of absorbing these potential costs without detrimental impacts. Within the government, discussions also stir around probationary periods, with Rayner advocating for immediate full employment rights post a brief probation, whereas Reynolds seems inclined towards extending this period to up to nine months.
As Labour gears up to reveal its flagship employment rights bill, ministers are working diligently to reconcile the dual objectives of safeguarding business interests and enhancing worker protections.
The forthcoming employment rights bill seeks to strike a delicate balance between protecting workers and addressing business concerns.
