Zero-hour rule a ‘substantial menace’ to jobs

A guaranteed hours rule for workers is a ‘substantial threat to good jobs’, according to a coalition of business bodies which is urging the Government to water it down.

The rule – part of Labour’s workers’ rights legislation – is designed to give more job security to people on zero- or low-hour contracts.

But trade groups representing firms which employ millions of people have written to Business Secretary Peter Kyle to warn that the measure, due to come into force next year, will backfire.

‘The current approach risks stripping flexibility from the labour market at precisely the wrong moment,’ the letter says. ‘With demand already weakened, poorly designed guaranteed hours measures could become a tipping point, pushing employers to reduce hiring, limit hours or withdraw flexible roles.’

Warning: Trade groups representing firms which employ millions of people have written to Business Secretary Peter Kyle

To avoid a double whammy of rising unemployment and fewer young people entering the labour market, it requests an ‘urgent and clear message’ to encourage businesses to continue to hire with confidence.

The letter, signed by the British Retail Consortium, Food and Drink Federation, Recruitment and Employment Confederation and UK Hospitality, comes amid fears unemployment could soon pass 2m.

Youth joblessness has soared after Labour’s National Insurance hikes and rises in the minimum wage made hiring young people costlier.

New workers’ rights pile on further pressure. Some rules including those on sick pay and trade union recognition have already taken effect.

Guaranteed hours rules seek to give more certainty to those who work regularly, by promising them a set number of hours rather than facing the uncertainty of not knowing when they will be given shifts.

But bosses say more flexibility is needed to reflect differing needs of workers, for example, in industries where demand is higher in certain seasons or when production cycles vary.

Business leaders also want the rules to apply only to those workers on contracts of up to eight hours a week ‘rather than sweeping up workers who don’t need low-hours protections and giving workers a right to demand more work where that may not be available’.