Yahoo Finance Labour warned of ‘unintended consequences’ of zero-hours ban
Labour has been warned that its plan to clamp down on zero-hours contracts could cause economically damaging “unintended consequences” for businesses.
Hospitality and leisure bosses said the ban risked saddling them with needless paperwork that would make it harder to hire and expand.
Stephen Burns, the chief executive of Hollywood Bowl, which runs 10 pin-bowling alleys, said a clampdown could make it harder for businesses such as his to attract staff.
He said: “I’m not a fan [of the policy]. There’s quite a lot of businesses like ours that are very seasonal, and rely heavily on team members who want that flexibility… rather than forced hours that people that cannot or can’t then commit to.”
Labour has promised to ban “exploitative” zero-hour contracts, as part of a package of promises on workers rights offered up ahead of the election, which Labour has dubbed a “new deal for working people”.
Business chiefs worry that a clampdown could make it harder for them to attract staff to seasonal industries, such as leisure, hospitality and retail.
Bosses have been meeting with unions and Labour representatives over recent months to discuss the policy, which is one of Labour’s key pledges on workers rights, ahead of the general election in July.
Mr Burns said: “At the minute, it’s really easy for somebody to start working, we ask them what hours they would like to work, and then we build our rotas around that by having the ability to have quite a few people on the books during those periods.
“When you’ve got contracts, you then lose that ability and you lose all the flexibility. And then you get all of these people who you’ve had to set up on a full-time contract or contracted hours, that you know are going to work for you for three weeks over the October period. So a huge amount of extra workload.”
Around 1.1 million people in Britain are currently on zero-hours contracts in the UK, according to recent research by The Work Foundation at Lancaster University – roughly 3.4pc of the British workforce.
Advocates argue they offer flexibility, allowing people to pick and choose when they work to suit them.
However, critics claim the contracts offer “insecure” employment.
Labour does not plan to outlaw zero-hours contracts completely, and will allow companies to offer employees a choice to remain on zero-hours in a bid to make sure seasonal workers are not unduly affected.
However, this in turn has left it open to criticism from union bosses this could leave scope for abuse by rogue employers.
Kate Nicholls, chief executive of UK Hospitality, which represents pubs, restaurants and nightclubs, said: “The key will be to make sure that the detail of the policy is right.
“Nobody wants to impose burdens on businesses that would cut across good employment practices.”
Mohammad Jamei, director of economic policy at the Confederation of British Industry (CBI) said: “Any changes that have been proposed on the employment side have to be weighed up against some of the opportunities that they could potentially close down.
“We want businesses to be able to take risks to open new premises and grow without them being concerned about some of the impacts that that might have if employment law is changed significantly.”
The National Living Wage increase that came into effect in April already means businesses are holding back on investments because of higher labour costs, Mr Jamei said.
“It really has posed a challenge for many businesses in being able to undertake capital investment on plants and machinery. That is despite full expensing coming in from November last year,” he said.
The CBI has called for a new remit for the Low Pay Commission to make sure that minimum wage requirements do not restrict businesses from investing.
A Labour spokesman said: “Businesses will still be able hire seasonally and workers will be free to stay on a variable contract if that’s what works best for them – but we won’t put up with one-sided flexibility.”
“Labour will make work pay. We will tackle insecure work by banning exploitative zero-hours contracts, giving workers the right to have a contract that reflects the number of hours they regularly work.”
