TUC urges UK business to ‘get on board’ with Labour’s worker rights plans

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Most employees on zero-hour contracts have been “stuck” in their job for more than a year, the umbrella body for the UK union movement said on Tuesday, as it called on businesses to back Labour’s plans to strengthen workers’ rights.

The Trades Union Congress also slammed a new government code of conduct on the use of “fire and rehire” practices, where companies use threats of dismissal to pressure staff into accepting worse terms and conditions, saying it lacked “bite” and would not stop bad employers treating staff as “disposable”.

Keir Starmer’s pledge to ban zero-hour contracts — under which employers do not offer any guaranteed minimum of working hours — if he wins power is one of the most controversial elements in a package of reforms designed to give workers more security and unions a bigger voice.

Badged a “New Deal for Workers”, the proposals also include ending fire and rehire, giving employees protection against unfair dismissal from the first day of a new job, piloting arrangements for sectoral level collective pay bargaining, and rolling back recent anti-strike laws.

Business groups are increasingly expressing alarm over measures they view as a threat to the flexibility of the UK labour market and a potential deterrent to hiring.

Rupert Soames, president of the CBI lobby group, told the Financial Times this month that strong workers’ rights could be “really bad” for unemployed people “because companies are terrified to take them on”.

Groups such as the CBI say zero-hour contracts can offer valuable flexibility to both employers and workers. Neil Carberry, chief executive of the Recruitment & Employment Confederation, said they helped agencies offer employee rights to people who would otherwise be taken on as temps.

But Paul Nowak, TUC general secretary, said employers needed to “get on board” with Labour’s New Deal rather than “parking” workers on contracts that handed managers “almost total control over workers’ hours and earning power” and made it “nigh on impossible to plan budgets and childcare”.

The TUC said official data showed that 1.15mn people were on zero-hour contracts at the end of 2023. Of these, more than one-third had been with their current employer for over a year, almost half for more than two years, and one in eight for more than a decade.

The TUC said internal polling in 2021 showed the most common reason for taking zero-hours work was lack of alternative, with only one in 10 respondents citing work-life balance.

However, lawyers and business groups say an outright ban on zero-hour contracts would be unworkable.

The TUC is in practice not calling for a ban, but for workers to have a right to a contract that reflects their regular working hours. Some unions take a harder view, making it clear than anything less than an outright ban would be viewed as a betrayal by Labour.

The party’s plans mark a change of tack from the approach taken by the Conservative government. It has promised to address many of the same concerns over precarious work, but has generally favoured a voluntary approach to new regulation.

On Tuesday, the government published a new statutory code of practice setting out the steps employers should take to consult staff when proposing changes to their contracts.

Business minister Kevin Hollinrake said the code would “crack down on employers mistreating employees” while also “balancing protections for workers with business flexibility”.

But Sharon Graham, general secretary of Unite the Union, said tackling fire and rehire through a code of practice was a “bad joke” when it “should obviously be against the law, with serious penalties attached”.