Foodservice operators including bakery cafes have until 25 August to make their voices heard on proposed changes to zero hours contracts and shifts.
A government consultation is currently seeking views on the proposals that will oblige businesses to offer guaranteed hours contracts to eligible employees on zero hours contracts, provide reasonable notice of shift patterns and introduce compensation for cancelled or changed shifts.
These changes under the Employment Rights Act, which apply to operators in England, Scotland, and Wales, are said to form part of the government’s manifesto committed to end one-sided flexibility and ensure all jobs provide a baseline of security and predictability.
However, trade body UKHospitality argued that the labour law reform actually risk increasing job instability, with currently proposed changes acting as a barrier to the number of jobs and hours offered by foodservice businesses.
The extreme financial pressure facing hospitality businesses and the increased and costly administrative burden from the proposed changes mean that they should not be implemented before October 2028, warned the organisation.
The threshold at which a worker is eligible for guaranteed hours contracts should be set at eight hours per week or fewer, to genuinely reflect low hours, suggested UKHospitality. In addition, employees must work regularly (at least 10 out of every 12 weeks and at least 20% more than their contracted hours), while the reference period should be sufficiently long enough to account for seasonal trading, set at either at 26 or 52 weeks.
Allen Simpson, chief executive of UKHospitality, described the changes to how zero hours contracts and shifts will be managed in the future as “undoubtedly one of the most significant” to the Employment Rights Act.
“One of hospitality’s defining qualities is its ability to offer anyone the opportunity to work, regardless of their background, qualifications or circumstances,” he commented.
“If Government does not get this right, it risks creating barriers to employment, particularly for young people, and restricting the ability of businesses to adapt to their customers’ needs,” added Simpson, who noted they were consulting with members to ensure a response was reflective of the entire foodservice sector. “It’s critical the Government hears from individual operators, too. I would encourage all operators to respond to this important consultation to make their voice heard.”
‘Eyewatering’ cost of reform
In support of the consultation on proposed changes to zero hours and similar contracts, the government has published analysis that includes an estimate of the direct cost to employers ranging between £350m and £2.9bn per year.
UKHospitality chair Kate Nicholls called the cost “eyewatering” and said they came at the worst time possible for hospitality businesses, which have been hit with more than £5bn in additional labour costs in the past two years.
“More than 100,000 jobs have already been lost in hospitality as a result and the extraordinarily high cost of employment continues to restrict job opportunities, particularly for young people. This is on top of hospitality being disproportionately hit by business rates and our high rate of VAT,” she said.
“The Government should be incentivising employment in hospitality, as a sector that employs the most young people, most part-time workers and the most non-graduates. Instead, these reforms add yet more cost, at a scale that far outweighs the cost benefits for employees,” Nicholls added.
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