UK Government Launches Consultation on 12-Week Reference Period for Zero-Hours Contracts Amid Business Warnings of Job Losses

Consultation documents released on Tuesday set out plans for a 12-week reference period that would fix the guaranteed hours employers must offer workers on zero-hours or low-hours contracts. Once the period establishes a worker’s typical hours, employers would be required to offer equivalent shifts for the rest of the year regardless of changes in demand.

The proposals also require employers to give reasonable notice of shift allocations, alterations and cancellations.

Employers who cancel, move or shorten shifts with less than four weeks’ notice could face compensation payments of up to 80 per cent of the worker’s lost earnings. Labour’s consultation asks whether workers regularly employed for up to 20 hours a week should qualify for the protections and seeks views on raising the threshold to as much as 40 hours.

The measures form part of the Employment Rights Act and were originally championed by former deputy leader Angela Rayner.

7 million people work 16 hours or fewer each week. 2 per cent, its highest level in more than a decade, according to Office for National Statistics figures. John Foster of the Confederation of British Industry described the proposed 12-week reference period as “wholly unworkable” and warned the changes “have the potential to reshape working patterns right across the economy”.

He said the measures “risk reducing work opportunities, making overtime non-viable and discouraging employers from offering shifts that many workers actively want”. Shadow business secretary Andrew Griffith said the consultation “risks ending the role of seasonal and temporary workers in the labour market”.

He added that young people would suffer most from the changes at the same time ministers claim they are trying to reduce the number of people outside education, employment or training.

Neil Carberry of the Recruitment and Employment Confederation said he was disappointed the Government had “drifted so far from the original proposals agreed by businesses and unions”. Kate Nicholls, chairman of UKHospitality, urged ministers to extend the reference period to 26 weeks, warning that hospitality businesses would be particularly affected.

Helen Dickinson, chief executive of the British Retail Consortium, said retail remained a vital entry point into employment for hundreds of thousands of young workers each year.

Ben Willmott of the Chartered Institute of Personnel and Development warned that excessively burdensome regulations could encourage employers to rely more heavily on self-employed contractors and fixed-term arrangements, potentially creating more precarious forms of employment.