Trade unions have raised concerns that Labour’s proposed reforms to zero-hours contracts could fall short of the commitments outlined in the party’s manifesto.
Union leaders are seeking urgent reassurances from Business Secretary Jonathan Reynolds, criticising what the Trades Union Congress (TUC) has labelled as “scaremongering” by business groups.
Trade unions expressed alarm over proposed limitations on eligibility for new guaranteed-hours contracts, which were highlighted in Labour’s recent consultation document.
Joanne Thomas, general secretary of the shop workers’ union Usdaw, stated that the right to a contract guaranteeing regular working hours is a fundamental issue of fairness and security. “It must be applied universally to deliver on the government’s manifesto commitment,” she added.
She emphasised that the policy must cover all workers, including those on full-time contracts, warning that any loopholes would render the initiative meaningless.
Ross Holden, head of policy and research at the GMB union, expressed concern that without significant revisions, the policy risks failing to align with the party’s manifesto promises.
He further noted that unions are anxious about whether their feedback carries sufficient weight in the policy-making process, warning that a one-sided development approach could lead to a diluted outcome.
The Unite union raised separate concerns regarding a government-suggested “regularity requirement,” which the union argues would exclude a substantial number of workers.
A Unite spokesperson remarked that if the government’s goal was to create an unenforceable right that few could qualify for, they could not have executed the task more effectively.
Eliminating “exploitative” zero-hours contracts remains a core objective of Labour’s Employment Rights Act. Although the legislation has already passed into law, the specific provisions targeting zero-hours contracts are not scheduled for implementation until next year, with many details still under negotiation.
A consultation document released during Keir Starmer’s tenure as Prime Minister proposed an upper hours threshold. Under these proposals, workers whose existing contracts guarantee hours exceeding this threshold—potentially set between eight and 48 hours—would be excluded from the new right to a contract reflecting their actual working hours.
Business organisations quickly highlighted official government estimates suggesting that the most expansive version of the policy could cost companies up to £2.9 billion annually. The British Chambers of Commerce described these potential costs as “a further hammer blow” for businesses already struggling to stay afloat.
Kate Bell, assistant general secretary of the TUC, pointed out that 40% of the maximum projected costs would stem from compensation for short-notice shift cancellations. She argued that this estimate assumes employers will not adapt their business models, despite having the creativity and experience to do so.
Bell added that the same document revealed that irregular and unpredictable shifts cost approximately one in three zero-hours contract workers about £3,000 annually.
“We find ourselves repeating the same arguments over and over regarding the genuine costs of worker insecurity,” she remarked. “Most individuals do not desire these types of contracts; long-term exposure to such instability carries significant consequences for both mental health and financial security.”
Reynolds was reinstated as Business Secretary in Andy Burnham’s recent cabinet reshuffle, having previously been removed from the role by Keir Starmer. With the consultation on zero-hours contracts closing next week, this issue will be among the first major challenges he addresses upon his return.
A government spokesperson commented, “We remain fully committed to ending exploitative zero-hours contracts, where workers shoulder all the financial risk when hours, shifts, and earnings are unpredictable. These reforms are designed to provide workers across all regions with greater income security and predictable working hours.”
The spokesperson further noted, “While no final decisions have been finalised, we are actively consulting with business groups and trade unions—including GMB, Unite, and Usdaw—to ensure the details are practical and effective in the real world.”
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