Securing the Workforce: The Future of Zero-Hours Contracts and Unfair Dismissal Protections

The Future of Zero Hours Contracts

One of the key proposals is to end the cynical or exploitative use of zero-hours contracts and introduce more stable employment conditions.

Labour’s Proposed change

A ban on the cynical use of zero-hours contracts aims to ensure employees receive contracts that reflect their regular working hours. This would be based on a 12-week reference period.

• Expected Benefits: the new policy aims to provide greater financial security, improved work-life balance, and higher job satisfaction.
• Potential Challenges: employers might face increased administrative burdens and scheduling difficulties, especially in industries with variable demand.

Implementation

Using a 12-week reference period, employers will be required to offer contracts that reflect the actual hours worked by employees, promoting more permanent and stable employment agreements.

Day One Right to Unfair Dismissal Protection

Currently, employees need at least two years of service to claim unfair dismissal.

Labour plans to extend protection from unfair dismissal to all employees from their first day of employment, rather than after two years of service.

Labour’s Proposed Change

Labour plans to extend protection from unfair dismissal to all employees from their first day of employment, rather than after two years of service.

Additionally, although Labour indicates that they will still allow the use of probationary periods, it is not immediately clear how this will work in practice given this proposed change.

• Expected Benefits: increased employee confidence, job satisfaction, and a reduction in unfair dismissal cases.
• Potential Challenges: there could be an increase in tribunal claims. This will likely add additional time, risk and cost for businesses when it comes to implementing dismissals. This might mean employers need to think more carefully about their initial hiring decisions.

Implementation

Detailed guidelines on fair dismissal processes and training for employers on performance management will be essential for smooth implementation.

Robust performance management processes will be required for underperforming recruits from an early stage.

Banning Fire and Re-Hire Practices

‘Fire and hire’ practices involve dismissing employees and rehiring them on less favourable terms, as a way to change contracts of employment.

Labour’s Proposed Change

Labour intends to ban ‘fire and hire’ practices due to it being seen as unfair and destabilizing for workers, with the intention of this change promoting a more secure and stable job market.

• Expected Benefits: increased job security and trust between employees and employers.
• Potential Challenges: employers may find it harder to make adjustments to their workforce in response to economic pressures.

Implementation

Legislation will explicitly prohibit fire and hire practices, with penalties for non-compliance.