Labour Zero-Hours Reform Faces Union Warning

Published: 22 August 2026. The English Chronicle Desk. The English Chronicle Online

Trade unions have warned the Labour government that its planned reforms to zero-hours contracts could fail to deliver one of the party’s key manifesto commitments unless ministers remove proposed restrictions on which workers will be entitled to guaranteed hours.

Union leaders are seeking assurances from Business Secretary Jonathan Reynolds as the government prepares to finalise legislation aimed at ending what Labour has described as exploitative employment arrangements. The reforms are part of the wider Employment Rights Act, which has already become law, although the changes affecting zero-hours and similar contracts are not expected to take effect until next year.

The dispute has emerged as the government consults employers, trade unions and other interested groups over how the new rights should operate in practice. While ministers insist they remain committed to giving workers greater security and predictable working patterns, unions fear that proposed eligibility requirements could significantly reduce the number of people who benefit from the reforms.

At the centre of the disagreement is a proposed right for workers to receive contracts reflecting the hours they regularly work. Labour has pledged to move away from employment arrangements in which workers can be required to remain available while having no certainty about when they will receive work or how much they will earn.

However, a consultation document published by the government has suggested that an upper-hours threshold could be introduced. Under the proposal, workers whose existing contracts already guarantee more than a certain number of hours could be excluded from the new right to a contract matching the hours they actually work.

The threshold could potentially be set anywhere between eight and 48 hours a week. The final level has not yet been decided, but unions fear that setting the threshold too low could leave large numbers of workers outside the protection Labour promised during its election campaign.

Joanne Thomas, general secretary of the shop workers’ union Usdaw, said the right to a contract reflecting workers’ normal hours should be available broadly and without loopholes. She argued that the principle was about providing basic fairness and security to people whose working patterns had previously left them uncertain about their income.

The union movement’s concern is that the government could technically introduce a new legal right while designing it in such a restrictive way that relatively few workers could successfully use it. Such an outcome, union leaders argue, would undermine the political promise behind the legislation.

Ross Holden, head of policy and research at the GMB union, said there was a risk that the government’s developing policy would not match the commitment made in Labour’s manifesto. He also expressed concern that union views might not receive sufficient consideration as ministers balance competing demands from businesses and workers.

Unite has raised another concern over what has been described as a regularity requirement. The proposed condition could require workers to demonstrate a sufficiently consistent pattern of hours before they become eligible for a guaranteed-hours contract.

The union argues that such a requirement could exclude a substantial proportion of workers who experience irregular schedules precisely because they are employed on insecure contracts.

Unite said the government could hardly design a system less accessible to workers if it created a right that very few people were able to qualify for or enforce. The criticism reflects a wider concern among unions that the reforms could be weakened during the implementation process.

The dispute comes as business organisations have raised strong objections to the potential financial cost of the reforms. Government estimates published last week suggested that the most expansive version of the proposed policy could cost businesses as much as £2.9bn a year.

The British Chambers of Commerce warned that the potential cost would create another significant burden for companies already dealing with difficult economic conditions. Business representatives argue that employers need flexibility to respond to changing demand, particularly in industries where staffing requirements can vary significantly from one week to another.

The government has acknowledged that the reforms could create additional costs for employers but has argued that the impact needs to be considered alongside the financial and social costs of insecure employment.

The Trades Union Congress has criticised what it regards as exaggerated warnings from some business groups. Kate Bell, the TUC’s assistant general secretary, said a substantial proportion of the government’s highest cost estimate was linked to compensation employers might have to pay when shifts were cancelled at short notice.

According to Bell, that calculation assumes employers will not change the way they organise their workforces. She argued that businesses have the ability to adapt their staffing models once the new rules are introduced.

The wider economic argument is therefore becoming an important part of the debate. Employers say the reforms could increase labour costs and reduce flexibility, while unions argue that existing zero-hours arrangements transfer too much of the financial risk from companies to workers.

Under insecure contracts, workers can face significant uncertainty about how many hours they will receive and therefore how much money they will earn. That uncertainty can make it difficult to manage household finances, plan childcare, secure housing or take on other commitments.

The TUC has pointed to government analysis suggesting that irregular and unpredictable shifts impose significant financial costs on workers. According to the figures cited by the union, approximately one in three workers on zero-hours contracts could lose around £3,000 a year because of irregular working patterns.

Bell argued that the consequences of insecure employment extend beyond wages. Workers who cannot predict their income may experience increased financial pressure and difficulties planning their lives. The unions believe those wider costs should be considered when assessing the economic impact of the reforms.

Labour’s original pledge to tackle exploitative zero-hours contracts was presented as part of a broader effort to strengthen employment rights. The Employment Rights Act represents one of the government’s major legislative programmes, with ministers promising greater security for workers and stronger protections against insecure employment practices.

However, implementing the legislation has proved more complicated than establishing the broad principle. Ministers must determine how guaranteed-hours rights will interact with existing contracts, changing business requirements and industries where demand fluctuates.

The government also faces pressure from employers concerned about the financial implications. The estimated £2.9bn annual cost attached to the broadest version of the policy has provided business groups with a powerful argument for limiting its scope.

Union leaders believe that pressure could result in the reforms becoming substantially weaker than the policy originally promised. Their concern is particularly focused on eligibility rules because the effectiveness of the new rights will depend on how many workers can access them.

Jonathan Reynolds has returned to the role of business secretary following a major reshuffle by Andy Burnham last month. The zero-hours consultation is due to close next week, making the issue one of the first significant challenges facing Reynolds in his renewed role.

The government has insisted that no final decisions have been made and that ministers are still considering the views of both employers and trade unions.

A government spokesperson said Labour remained fully committed to ending exploitative zero-hours arrangements in which workers carry the financial consequences of unpredictable hours, shifts and earnings. The government argues that the reforms will provide workers across the country with greater income security and more predictable working patterns.

Ministers also stressed that consultations with organisations including GMB, Unite and Usdaw were intended to ensure the final system could operate effectively in workplaces.

The challenge for Labour is to find a balance between its political commitment to employment security and concerns from businesses about cost and flexibility. A system that is too restrictive could disappoint unions and workers, while regulations that impose substantial costs without sufficient flexibility could face continued resistance from employers.

The debate is likely to intensify as the consultation deadline approaches. Once the government decides on the final eligibility rules, the extent of its original promise will become clearer.

For Labour, the stakes are considerable. Zero-hours contracts were a prominent part of its pledge to improve working conditions, and unions played an important role in supporting the party’s wider employment agenda.

If workers who regularly perform substantial hours are excluded from guaranteed-hours protections because of technical thresholds or regularity requirements, unions are likely to argue that the government has failed to fulfil its commitment.

Business organisations, meanwhile, are expected to continue pressing ministers to ensure that the new system does not create excessive costs or make it harder for companies to adjust staffing levels in response to changing demand.

The government must now decide whether the final reforms will prioritise broad access to guaranteed hours or introduce limitations designed to protect employers from additional costs and administrative burdens.

The outcome will determine whether Labour’s promise to tackle insecure employment produces a meaningful change for workers on zero-hours contracts or becomes a more limited reform than many union leaders expected.