Companies could soon be required to offer regular contracts to workers on zero-hours contracts after just three months, under proposed reforms being discussed by the Labor government.
Deputy Prime Minister Angela Rayner and Business Minister Jonathan Reynolds informed business leaders and unions in a private meeting that new legislation could require employers to offer zero-hours staff a regular contract with guaranteed hours after 12 weeks. The move is part of Labour’s wider push to end ‘exploitative’ employment practices, although details are still being finalized ahead of the unveiling of the Employment Rights Bill next month.
The three-month threshold follows the example of McDonald’s, which in 2017 gave employees the option to switch to contracts with minimum guaranteed hours. Most employees chose to stay on flexible terms, but the initiative is cited as a model for balancing worker protections with the needs of business.
Sources involved in the discussions said opinions were divided, with some company executives suggesting a longer qualification period and union representatives calling for a shorter time frame. A Whitehall insider explained that the three-month proposal was intended to elicit clearer responses from businesses, and that further details would be developed later.
Labor has promised to curb “unilateral flexibility” in the workplace. Proposals include requiring employers to compensate staff for late cancellations of shifts, to prevent workers from being financially disadvantaged if services are canceled at the last minute. While Labor initially considered a complete ban on zero-hours contracts, it has backed away from this following resistance from businesses, especially in the hospitality and leisure sectors, who argue that the contracts provide valuable flexibility for both workers and employers.
The debate over zero-hours contracts is part of Labour’s pledge to implement the biggest overhaul of workers’ rights in decades. However, business leaders have expressed concerns about the potential costs of the reforms. The Confederation of British Industry (CBI) reported that only 26 percent of businesses are confident they can deal with the financial impact without damaging growth, investment or jobs.
Tensions have also arisen within the government over how probation periods should be handled in the new system. Rayner is pushing for full employment rights from day one, after a short trial period, while Reynolds is reportedly in favor of a longer trial period, potentially lasting up to nine months.
The government’s main employment rights bill is expected to be unveiled in the coming weeks as ministers try to reconcile business concerns with their commitment to improving worker protections.