Zero-hours contract reforms face eligibility scrutiny as consultation nears close
Trade unions argue that proposed upper hours thresholds and regularity requirements may undermine Labour’s manifesto pledge to end exploitative work arrangements.
Trades unions are urging the government to clarify eligibility criteria for new guaranteed hours contracts, warning that proposed limitations risk diluting the Labour Party’s manifesto commitments. Union leaders from Usdaw, GMB, and Unite have sought reassurances from Business Secretary Jonathan Reynolds, who returned to the role following a recent cabinet reshuffle. The consultation on the policy, a component of the Employment Rights Act, is set to close next week, placing the issue at the forefront of Reynolds’ early tenure.
The core of the dispute centres on an upper hours threshold included in a consultation document published while Keir Starmer was still at No 10. Under this provision, workers whose existing contracts already guarantee more than a set number of hours—potentially ranging from eight to 48—would not qualify for the new right to a contract matching their actual working hours. Joanne Thomas, general secretary of Usdaw, stated that the right to guaranteed hours is a matter of basic fairness and must apply to everyone up to and including full-time workers to avoid loopholes that render the policy meaningless.
Unite has separately flagged a “regularity requirement” suggested by the government, claiming it would exclude a significant number of workers from the new rights. A spokesperson for the union argued that if the government aimed to create a right that virtually no workers could qualify for or enforce, it had done a better job than expected. Ross Holden, head of policy and research at the GMB, expressed concern that without a major rethink, the policy risks not matching the manifesto, warning that one-sided policy development could lead to the measures being watered down.
Business groups have countered with cost concerns, citing official estimates that the most expansive version of the policy could cost companies up to £2.9bn a year. The British Chambers of Commerce described the prospect as a further hammer blow for firms struggling to remain viable. However, Kate Bell, assistant general secretary of the TUC, noted that 40% of that upper cost estimate relates to compensation for short-notice shift cancellations, assuming no behavioural change by employers.
The TUC has condemned business arguments as “scaremongering,” pointing to data indicating that irregular and unpredictable shifts cost one in three workers on zero-hours contracts approximately £3,000 a year. Bell emphasised that most workers do not want to be on these contracts, citing the long-term costs to their mental health and financial security.
A government spokesperson reaffirmed the commitment to ending exploitative zero-hours contracts where workers bear all the financial risk of unpredictable hours and earnings. The spokesperson stated that while no final decisions have been made, the government is consulting with business and trade unions, including GMB, Unite, and Usdaw, to ensure the reforms work in the real world. The specific zero-hours changes are not due to be implemented until next year.
