Guaranteed hours rules ‘would threaten jobs’, government warned

Four leading trade bodies have warned the government that new rules around guaranteed hours would increase unemployment and prevent young people from entering the jobs market.

The industry bodies have raised concerns over Labour’s guaranteed hours policy, a part of the Employment Rights Act which became law in December.

The British Retail Consortium, Food and Drink Federation, Recruitment and Employment Confederation and UKHospitality said in a letter to the government that the measure will lead to poorer opportunities and conditions for workers.

The new rules would require bosses to offer a fixed contract with guaranteed hours to qualifying workers, who have worked at least 12 weeks. 

The government is currently consulting on how it will implement the rules, and the results of this inquiry were first due to be released last autumn but have since been delayed.

Reforms come at ‘precisely wrong moment’

The trade bodies have called on the government to water down the policy to avoid “the double whammy of increasing unemployment and fewer young people entering the labour market”.

The letter said: “Across our sectors, concern is deep and growing that the current approach risks stripping flexibility from the labour market at precisely the wrong moment.

“With demand already weakened, poorly designed guaranteed hours measures could become a tipping point, pushing employers to reduce hiring, limit hours or withdraw flexible roles altogether, denying work to those who need it most, or moving to less secure, more casual models of engagement.”

Helen Dickinson, the British Retail Consortium’s chief executive, told City AM last week that the rules could force employers to offer more work to people who only want flexible roles.

This could make it less feasible to offer flexible roles, threatening the casual employment in hospitality and retail which is often the first experience of employment for young Brits, she said.

Rules would make businesses ‘more cautious’

“It makes businesses more cautious, it makes people more concerned about hiring people. Small, marginal decisions by lots of businesses have a big impact, she said.

The trade bodies’ warning comes as the number of young people not in education, employment or training nears one million.

A government spokesperson said: “We will only achieve a thriving economy once people have a wage they can count on, which is why we’re giving greater certainty to over half the UK’s workforce through our Employment Rights Act.

“We will ensure people can have the security they need by giving eligible workers the right to guaranteed hours, and we will work closely with workers and employers on how the measures are implemented.”