Retail industry bodies have warned that the UK Government’s consultation defining the terms of a proposal to seriously restrict zero-hours contracts could be detrimental to business, as the Government’s own assessment projects that it could cost employers £350m to £2.9bn a year.
The Plan to Make Work Pay, published in June and under consultation until the end of August promises to “create a modern, fairer labour market – where workers are better protected and empowered to work to the best of their abilities.”
The specific proposal to regulate a significant proportion of zero-hours contracts – which would enforce a Guaranteed Hours Duty, reasonable notice for shifts and cancellation compensation – it claims, will help millions of workers facing uncertainty over their weekly hours and earnings, while supporting up to £10bn in economic growth by improving employee “wellbeing and engagement.”
The Government’s objective is to apply changes to people working between eight and 20 hours a week, meaning it is likely to cost far less than the highest ceiling projected, based on a 48-hour week.
Helen Dickinson, CEO of the British Retail Consortium (BRC) said the changes would impact businesses already struggling following NI insurance rises.
“Adding further costs when youth unemployment is soaring risks being a hammer blow to young people’s job prospects, at precisely the time businesses across the country need to be creating more opportunities,” she said.
The Guild of Fine Food’s managing director, John Farrand, said that “while the often maligned zero-hour contract is certainly open to abuse, “it definitely has its place in retail and can provide flexibility for both the employer and the employee.”
“Perhaps the focus should be on educating employers of best practice around zero-hours contracts rather than banning them.”
The CEO of the British Independent Retail Association (Bira) Andrew Goodacre said he hoped that in concluding the consultation, the Government would listen to the retail sector’s concerns.
He added that the highest estimated cost would be disastrous for retail, as it remains the largest private sector employer.
“It is remarkable that the Government would consider this as being good for growth and employment by adding significant more cost to employers,” especially after the rises to NI contributions two years ago, since when, according to RTI data, retail has lost more than 10,000 jobs.
This article first appeared in the September issue of Fine Food Digest.
