(UPDATED)

I’m spending an increasing amount of my time looking towards the next Labour Government and what it will mean for employment law. If the polls are right, it is going to be an exciting time to be an employment lawyer!

The main source for Labour’s policy on workers’ rights is ‘A New Deal for Working People’ a policy document launched by Deputy Leader Angela Rayner at the 2021 Labour Party Conference. It is significant that Angel Rayner continues to lead on this policy even though it would normally come within the brief of the shadow business secretary, Jonathan Reynolds. These proposals are a central part of Labour’s policy platform and we need to take them seriously.

In this post I want to concentrate on zero-hours contracts. Recent research from the Work Foundation has found that 1.1 million people in the UK are employed on zero-hours contracts and that almost three quarters of them experienced contractual and financial insecurity and a lack of access to basic employment rights. The report rejects the suggestion that zero-hours contracts provide welcome flexibility for both employers and workers and recommends that they should only be permitted where employees actively choose them.

Labour has been pledged to do something about zero-hours contracts for almost a decade.

• In 2015 the Party’s manifesto said that “Labour will ban exploitative zero-hours contracts. Those who work regular hours for more than 12 weeks will have a right to a regular contract.”
• The 2017 manifesto – the first with Jeremy Corbyn as leader – said that Labour would “ban zero hours contracts – so that every worker gets a guaranteed number of hours each week.” It went on to say “As well as legislating against zero hours contracts, there are many more workers on short hours contracts (some only guaranteed a few hours per week), but who regularly work far more. We will strengthen the law so that those who work regular hours for more than 12 weeks will have a right to a regular contract”
• Then in 2019, the manifesto pledged Labour to “Banning zero-hour contracts and strengthening the law so that those who work regular hours for more than 12 weeks will have a right to a regular contract, reflecting those hours”. 

So it is no surprise that in “A New Deal for Working People” we get this: 

Labour will ban zero hours contracts and contracts without a minimum number of guaranteed hours. We will also ensure anyone working regular hours for twelve weeks or more will gain a right to a regular contract to reflect those hours normally worked

It really couldn’t be much clearer. Labour’s long-standing policy is to ban contracts that do not have a minimum, guaranteed number of hours. Allied to that – but distinct from it – is a policy to ensure that those working regular hours over 12 weeks will have a right to a regular contract reflecting the hours that they have normally been working. 

Well maybe.

On 19 March Rachel Reeves delivered the Mais Lecture at the Bayes Business School. This is a prestigious event and she would have known that her words would be scrutinised carefully. Here is what she said about zero-hours contracts: 

We will ban exploitative zero hours contracts, by giving all workers the right to a contract that reflects the number of hours they regularly work, based on a twelve-week reference period.

Note that the proposal is to ban zero-hour contracts “by giving” workers a right to a contract reflecting the hours they normally work. The suggestion here is that the right to a regular contract where regular hours have been worked for 12 weeks is not a separate right in addition to the ban on zero-hours contracts, it is the method by which the ban on “exploitative” zero-hours contracts is to be accomplished. Is that right? If this had just been said casually in an interview I wouldn’t have attached any importance to it. This isn’t Rachel Reeves’ policy area and I wouldn’t expect her to be word perfect on what the policy is. But surely the wording of the Mais lecture was carefully checked with those whose policy areas were referred to? 

Over the weekend Analise Dodds MP was interviewed on Sky News and it was suggested that Rachel Reeves had not made it clear that zero-hours contract would be banned. She said this in reply:

Well we are going to ban them, and I can set out the detail of that if it is of interest. We’ve said that there should be an assessment period to understand the pattern of people’s hours and then ensure that people’s contracts reflect that.

So that actually seems to back up Rachel Reeves’ suggestion that the policy is to ensure that workers have a contract that guarantees the working pattern that they regularly work and that this is how the ban on zero-hours contracts will be achieved. With two senior front-benchers making the same point is it possible that some sort of policy shift is taking place here? Is Labour going to subsume the ban on zero hours contracts into some wider right to have a contract that reflects the hours that an employee has been working over an “assessment period”?  I’d be keen to hear what Angela Rayner has to say about that.

I’ve always been sceptical of a policy to ban zero-hours contracts. It is all very well saying that workers should have guaranteed working hours – but what is the minimum number of hours that will be guaranteed? If I guarantee you one hour a week then you may no longer be on a zero-hours contract, but your work is hardly less precarious than if there were no guaranteed hours at all. What would the guaranteed minimum be? 8 hours? 16? Perhaps as the reality of Government grows closer, Labour is thinking about what a ban on zero-hours contracts actually means. 

As it happens, however, I’m no more impressed by the policy of giving workers a right to a regular contract if they are, in practice, working regular hours. In the first place it strikes me that it is the workers who are not working regular hours who need the most protection. But there is also a risk that telling employers that if they give workers regular hours for 12 weeks then they will have to make that practice permanent, simply creates an incentive for employers to ensure that work stays irregular and unpredictable. I just don’t see how a policy that looks at a worker’s average hours over a 12 week period and then enshrines that average in the contract could be at all workable.

My suggestion would be to beef up the Workers (Predictable Terms and Conditions) Act 2023. That Act gives workers on unpredictable hours a right to request a regular work pattern. As currently drafted it is of almost no practical use because employers will still be able to refuse any request for a predictable work pattern as long as the decision is genuinely based on a business reason. There is no requirement for the refusal to be a reasonable one. But the Act could easily be amended to require employers to refuse requests only where there is a compelling business case for doing so. That would ensure that most workers could not be restricted to zero-hours contracts if they did not wish to be.

That could not quite be said to be a ban on zero-hours contracts – although perhaps Labour could say that it was “ending the practice of exploitative zero-hours contracts” which sounds almost the same.  Whatever the ultimate solution, Labour needs to think about how to convert slogans into legislation that actually works. Perhaps what Rachel Reeves said is part of that process. 

On the other hand, it might have been a typo.

UPDATE: 1 April (seriously)

In this post I asked what Angela Rayner would make of the comments made by Rachel Reeves and Analise Dodds. Well on 28 March Left Foot Forward published an interview with the Deputy Leader where she denied that there was to be any slow down in the rolling out of new employment laws under Labour. But here is what she said about Zero-hours contracts:

“What we won’t have is people working regular hours who are given a zero hour contract and no security, we’re calling time on that and I think most people recognise that and can see that you can’t get a mortgage, you can’t plan for your future, you can’t get credit if you’ve not got a contract that doesn’t give you any hours, it’s completely insecure’.

[Update to thee update: ~~Richard Dunstan (@wonkypolicywonk) has pointed out that this interview was quoting Angela Rayner speaking on the Today programme. He gives the full context of the comments here]

That does rather suggest that the ban on zero hours contracts will only apply to those working regular hours. this can’t just be a case of politicians speaking off the cuff and getting the details of two policies mixed up. There really has been a change.

This morning’s Times seems to confirm the shift in Labour’s thinking. In an article looking at the whole sweep of Labour’s employment law proposals we find this paragraph:

Labour has also promised to ban exploitative zero-hour contracts. This will not be an outright ban on all zero-hour contracts, recognising that some people appreciate the flexibility, but will take the form of putting a duty on employers to provide a contract based on the hours people have worked for the preceding 12 weeks.

I think the position is now as clear as it is going to be before the publication of the election manifesto. Labour will not ban zero hours contracts as such. Instead there will be some sort of law that will require employers to formalise working patterns that have been observed in practice so that the workers have some assurance that those hours will be continued in the future. I don’t quite see how a law like that would work without simply encouraging employers to keep working patterns as irregular and unpredictable as possible – but these are details that will have to be worked out when Labour is in Government.

I wonder which policy will be given this sort of treatment next. Fire and rehire perhaps?