New hours law could shut young workers out of jobs

A well-meaning push to guarantee workers stable hours could end up doing the opposite—cutting job opportunities and hitting young people hardest. Business groups are warning that taking flexibility out of hiring now risks shutting the door on entry-level roles just when the jobs market is already under strain.

New rules on guaranteed hours could push up unemployment and shut young people out of the jobs market.

The British Retail Consortium, Food and Drink Federation, Recruitment and Employment Confederation and UKHospitality have written to the Government saying the plans could slash opportunities, not improve them.

WHAT’S CHANGING? Under the new rules, part of the Employment Rights Act, which became law in December, employers would have to offer fixed contracts with guaranteed hours to workers who’ve been in the job for at least 12 weeks.

The Government is still consulting on how the rules will work in practice, but the results have been delayed.

Photo by Spencer Davis on Unsplash

TRADE BODIES SAY THE TIMING IS ‘ALL WRONG’ The four industry groups say the policy risks a “double whammy” of higher unemployment and fewer young people getting their first job. They say that taking flexibility out of the labour market now, when demand is already weak, could push employers to scrap flexible roles completely or reduce hours and recruitment. They say this could hit the people who rely on flexible work the most especially in the retail and hospitality sectors where jobs are already at risk from rising costs of doing business and customers with less money to spend.

‘MAKES BUSINESSES MORE CAUTIOUS’

Industry leaders say the changes could make employers think twice before taking on new people. Thousands of small decisions, like offering fewer shifts or delaying hiring, could add up to a big hit for a jobs market already showing signs of pressure.

The number of young people not in education, employment or training edges is already close to one million. Without starter level jobs and work experience that number is likely to keep on rising, costing young people their health and future earning power as well as costing the economy.

WHAT THE GOVERNMENT SAYS The Government’s aim is to give workers “a wage they can count on” and the Employment Rights Act will give eligible workers the right to guaranteed hours. Businesses don’t dispute the desirability of that but are concerned at how the measures will be implemented and the impact on jobs.

Ministers say they will work with employers and workers on how the rules are rolled out.

For smaller firms, the concerns are clear:

• Less flexibility in staffing

• More admin and compliance

• Harder to offer casual or seasonal roles

• All leading to more caution around hiring

Many small and micro employers rely on flexible hours to manage unpredictable demand such as orders over Christmas and catering for holiday makers over the summer. Industry groups say the new rules could make that harder and leave small firms unable to respond and compete. All this adds to yet more pressure on the hardest hit small and micro businesses that create a disproportionately large proportion of jobs.