Unions warn Labour zero-hours contract plans may dilute manifesto pledge

Trades unions have issued a stark warning to the government, arguing that proposed limitations on new guaranteed hours contracts risk rendering Labour’s manifesto commitment meaningless. Union leaders are seeking urgent reassurances from Business Secretary Jonathan Reynolds, who has recently returned to the role following a cabinet reshuffle. The concern centres on a consultation document that outlines restrictions on who will qualify for the new rights, a move the Trades Union Congress has condemned as a response to scaremongering from business groups.

Joanne Thomas, general secretary of the shop workers’ union Usdaw, stated that the right to a contract guaranteeing normally worked hours is a matter of basic fairness and security. She emphasised that the policy must apply to everyone, including full-time workers, to deliver on the government’s manifesto commitment. Thomas warned that loopholes could make the legislation meaningless. Ross Holden, head of policy and research at the GMB union, echoed these sentiments, expressing concern that without a major rethink, the policy risks failing to match the promises made in the manifesto. He noted that unions are worried their concerns are not being given sufficient weight and that a one-sided policy development process could result in the measures being watered down.

Unite raised a separate but related concern regarding a proposed regularity requirement. The union claimed this condition would exclude a significant number of workers from the new protections. A spokesperson for Unite criticised the approach, stating that if the government was attempting to create a right that virtually no workers could qualify for or enforce, they had done a thorough job. The core aim of Labour’s Employment Rights Act is to eliminate exploitative zero-hours contracts. While the Act has already become law, the specific changes regarding zero-hours contracts are not due to be implemented until next year, with many details still to be finalised.

The consultation document, published when Keir Starmer was still at No 10, included an upper hours threshold. Workers whose existing contracts already guarantee more than this threshold, which could be set between eight and 48 hours, would not qualify for the new right to a contract matching their actual working hours. Business groups have seized on official estimates published last week, which suggested 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 many firms struggling to keep their heads above water.

Kate Bell, assistant general secretary of the TUC, countered these claims by noting that 40% of the upper costs estimate was made up of compensation employers would pay for cancelling shifts at short notice. She argued that this assumes no behavioural change by employers and ignores their creativity and experience in adapting their models. Bell added that the same document showed irregular and unpredictable shifts cost one in three workers on zero-hours contracts about £3,000 a year. She highlighted the ongoing argument about the real costs of insecurity for workers, noting that most people do not want to be on these contracts and that they have significant impacts on mental health and financial security.

With the zero-hours consultation closing next week, the issue is one of the first Reynolds faces back in post. A government spokesperson stated that the government is absolutely committed to ending exploitative zero-hours contracts where workers bear all the financial risk. The spokesperson added that while no final decisions have been made, the government is consulting with business and trade unions, including GMB, Unite and Usdaw, to get the detail right and ensure the reforms work in the real world.