The UK government is contemplating a significant shift in employment practices, potentially mandating companies to offer regular hours to zero-contract workers after a three-month period. This development comes as part of a broader initiative to reform workers' rights and address concerns surrounding zero-hours contracts.
Angela Rayner, Deputy Prime Minister, and Jonathan Reynolds, Business Secretary, engaged in discussions with business leaders and union representatives on September 19, 2024, to explore this policy option. The proposal draws inspiration from McDonald's 2017 initiative, which allowed staff to transition to contracts with guaranteed minimum hours.
Zero-hours contracts, introduced in the UK during the 1990s, have been a subject of debate for years. These agreements, which do not guarantee minimum working hours, are prevalent in sectors such as hospitality, retail, and healthcare. In 2015, the UK government took a step towards regulation by banning exclusivity clauses in such contracts.
Currently, approximately 1.1 million individuals in Britain, representing 3.4% of the population, are employed under zero-hours contracts. This figure has been officially tracked by the Office for National Statistics since 2013, when the issue gained significant media attention.
While advocates argue that these contracts offer flexibility, critics contend they lead to financial insecurity and worker exploitation. The COVID-19 pandemic further highlighted the vulnerability of zero-hours workers to job losses.
The government's proposed reform aims to strike a balance between flexibility and worker protection. One Whitehall source stated that the goal is to end "one-sided flexibility" and protect workers from last-minute shift cancellations.
However, the proposed changes have met with mixed reactions. Hospitality and leisure industry leaders warn that restrictions on zero-hours contracts could hinder hiring processes and potentially impact the economy. The Confederation of British Industry (CBI) reports that only 26% of businesses feel confident they can absorb the costs of the proposed changes without negative consequences for growth, investment, or employment.
Interestingly, similar debates have occurred internationally. New Zealand banned zero-hours contracts in 2016, while Ireland restricted their use in 2018. The European Parliament has also called for an EU-wide ban on such contracts.
As the UK government prepares to unveil its employment rights bill in October 2024, internal disagreements persist. Rayner and Reynolds are reportedly at odds over the implementation of "day one" employment rights, particularly regarding the length of probation periods.
"Reforms were aimed at ending 'one-sided flexibility'. Proposals being worked up include forcing companies to pay people for late-notice shift cancellations so that workers are not in a position where their shift is cancelled when they're already on the bus to work."
This ongoing debate reflects the complex nature of balancing worker protection with business flexibility. As the government moves forward with its "biggest overhaul of workers' rights in a generation," the outcome will likely have far-reaching implications for both employers and employees in the UK.