Labour launched a new consultation this week on workers’ rights which could result in a huge overhaul of existing employment laws. The consultation was launched on Tuesday and will run until the end of August.  

The hottest topic in the consultation is zero hours contract reform. Bosses could be forced to give workers at least a week’s notice before cancelling a shift or otherwise pay them for it. Ministers are considering if the notice period should instead be 3, 14 or even 21 days. Workers would also have the right to be compensated if the shifts were shortened or moved at short notice.  

The options being discussed as to the extent of compensation given in these circumstances include payment linked to the length of notice or number of hours lost. However, one option on the table is full pay for a shift if it is cancelled at short notice. Bosses could face employment tribunals if they fail to comply with the new rules.  

Currently, more than 18 million people are on zero-hour contracts. The government has said that these new rules could save workers hundreds of pounds in lost income from the hidden costs of insecure work. The government has said this is part of ‘levelling the playing field’ in a labour market where one-sided flexibility benefits employers while workers bear all the financial risk. 

Business Secretary Peter Kyle said: “It’s not right that people can work regular hours but still have no certainty about their pay from week to week. These vital changes will mean more certainty for millions of people and will save the lowest paid workers hundreds of pounds. Banning exploitative zero hours contracts is totemic because this government believes that people should be treated with dignity and respect at work.”  

Employment Rights Minister Kate Dearden argued that the reforms would also benefit employers. She said: “Businesses can reduce staff turnover, improve skills, and boost productivity by improving job quality and workforce wellbeing by giving workers more security. This in turn can provide a boost to growth in the economy.” 

“The reforms risk an already slim job market shrinking further.”

However, critics warn that adding more red tape to employment laws could disincentivise businesses to hire. In the wake of a youth unemployment crisis, when many young people rely on zero-hour contracts, the reforms risk an already slim job market shrinking further.  

Andrew Griffith, the shadow business secretary, said: “Faced with more costs and employment red tape, many employers will simply offer fewer flexible roles. Once again young people will be hit hardest at exactly the same time the government says it wants to cut the shocking number of young people not in education, employment or training under their watch.” 

He added: “There is a certain irony in Labour giving powers to unions to call short-notice strikes and then saying employers must provide more notice to employees of their shifts.” 

“It’s vital the government ignores the bad faith scaremongering and gets on with delivering the change it promised.”

However, unions have been voicing support for the reforms. The Trades Union Congress (TUC) general secretary, Paul Nowak, told Mace: “Ministers must stand firm and crack on with delivering new rights to guaranteed hours in full. For too long, insecure work has held back our economy – leaving workers worried sick about not getting enough hours to pay the bills. Workers should know how much they’ll be earning from week to week instead of being at the whim of a bad employer who could cut shifts last minute.  That’s the kind of security you can build a life on. It’s vital the government ignores the bad faith scaremongering and gets on with delivering the change it promised.”  

He added: “Let’s be clear. Business groups calling on the government to row back on its manifesto promises are defending a broken status quo which has failed the economy and failed working people.” 

If they go ahead, the reforms will apply in England, Scotland and Wales and will be enforced through tribunals and the Fair Work Agency (FWA).