Chancellor Keir Starmer has been warned against succumbing to pressure to weaken the ban on exploitative zero-hours contracts after new evidence showed they are causing financial harm to millions of people in precarious work.
The bosses told the Prime Minister,Actual damage“If the government's proposals for the biggest reform of workers' rights in a generation are pushed through too quickly, it will be a huge blow to the economy.”
Labour's workers' rights reforms have been one of the biggest points of contention between the new government and business, and at a meeting with business groups and unions earlier this month, Deputy First Minister Angela Rayner and Enterprise Minister Jonathan Reynolds appeared to assure employers there would be a phased approach to introducing the reforms.
After meeting representatives of the UK's largest employers' organisations on Thursday, Finance Minister Rachel Reeves promised that the Government would “design policy jointly” with businesses based on shared priorities to boost economic growth.
“Under the new Administration's leadership, I will lead the most pro-growth, pro-enterprise Treasury in our country's history, with a focus on improving the lives of working people,” the finance minister said.
But Paul Nowak, general secretary of the Trades Union Congress (TUC), warned that banning zero-hours contracts must remain a top priority, despite intense lobbying from employers.
“I want to challenge business leaders and politicians who are trying to survive on zero-hours contracts without knowing how much work they'll have each week,” he said.
“Now is the time to raise employment standards in this country and ensure everyone has access to work. The Government's upcoming Employment Rights Bill will help create a level playing field and stop good employers being unfairly treated by bad employers.”
A new poll commissioned by the TUC finds that the majority of workers on zero hours (84%) want full-time hours, and that many on such contracts are struggling financially due to underemployment.
A survey of 2,458 employed UK people aged 16 and over by strategic polling firm Peter MacLeod found that 75% of workers on zero-hours contracts had struggled to cover living expenses because they were not given enough working hours.
The survey found that while two-thirds of workers on zero-hours contracts are asking for extra work, more than half (58%) have had their requests for more hours rejected by their employers.
During the general election campaign, Labour promised to enact legislation to strengthen workers' rights within its first 100 days in power, including banning exploitative zero-hours contracts, ending fire-and-rehire practices and introducing fundamental employment rights from day one.
Other reforms include repealing anti-trade union laws introduced by the previous government and setting up a single enforcement agency to ensure employment rights are upheld.
Sources attending a meeting of the government, business groups and trade unions this month said ministers had indicated that a ban on zero-hours contracts would be one of the first elements of any reform proposals.
Other more complex changes, such as creating a single form of employment to address exploitative practices in the gig economy, will take longer.
“They recognize the cumulative burden, so it makes sense to think about doing it in phases,” said one business leader who attended the meeting. “There are concerns about timeframes and about rushing things and moving in the wrong direction.”
But employers are seeking exceptions to the zero-hours ban, such as for seasonal workers and the ability to offer continuity to employees who want to maintain flexible working arrangements.
More than four million people in Britain are in low-paid, insecure work, including one million on zero-hours contracts, according to the TUC, the trade union umbrella body. The poll will be released in July. The survey shows that a majority of voters (67%) support banning the contracts.
Julian Richter, founder of Richter Sounds Hi-Fi Chain, Zero Hours Justice Campaigners said the ban was “long overdue” while some employers were abusing the system.
“It's time to get these out of the economy so that all workers who want a stable contract can get one. Higher employment levels benefit everyone,” he said.
