Companies could soon be required to offer workers regular contracts on zero-hours deals in as little as three months, under proposed changes being discussed by the Labor Government.
Deputy Prime Minister Angela Rayner and Business Secretary Jonathan Reynolds told business and union leaders at a private meeting that the new law would force employers to offer part-time workers a standard contract with guaranteed hours after 12 weeks. The move is part of a wider Labor plan to stamp out “exploitative” employment practices, although details are still being finalized ahead of the introduction of the employment rights bill next month.
The three-month limit follows the example set by McDonald’s, which in 2017 gave workers the option to switch to fixed-hours contracts. Most workers chose to remain on flexible terms, but the plan was characterized as a model for balancing worker protections with business needs.
Sources involved in the negotiations said opinions were divided, with some business leaders suggesting a longer eligibility period and union representatives advocating for a shorter period. A Whitehall insider explained that the three-month proposal was designed to bring clear responses from businesses, with other details to be developed over time.
Workers have promised to reduce “one-sided flexibility” in the workplace. Proposals include requiring employers to compensate workers for canceling late notices, to prevent workers from being financially disadvantaged if shifts are canceled at the last minute. Although workers initially considered a blanket ban on out-of-hours contracts, they backed off after opposition from businesses, particularly in the tourism and leisure sectors, who say the contracts offer significant flexibility to both workers and employers.
The debate on zero-hours contracts is part of Labour’s promise to deliver the biggest overhaul of workers’ rights in decades. However, business leaders have expressed concern about the potential costs associated with these changes. The Confederation of British Industry (CBI) reported that only 26 percent of businesses feel confident they can absorb the financial impact without harming growth, investment, or jobs.
Disagreements have also emerged within the Government over how to handle exam periods in the new system. Rayner wants full employment rights from day one, after a short trial, while Reynolds reportedly favors a longer trial period, which could last up to nine months.
The Government’s flagship employment rights bill is expected to be introduced in the coming weeks, as ministers work to reconcile business concerns with their commitment to improving worker protections.
