staff could be offered fixed hours after three months

Companies could soon be required to offer regular contracts to workers under zero-hours agreements after just three months, under proposed reforms being discussed by the Labour government.

Deputy Prime Minister Angela Rayner and Business Secretary Jonathan Reynolds told business leaders and unions at a special meeting that new legislation could require employers to offer a regular contract with guaranteed hours after 12 weeks for non-fixed-hours employees. The move is part of a wider push by Labour to end “exploitative” employment practices, although details are still being finalised ahead of the unveiling of an employment rights bill next month.

The three-month threshold follows the example set by McDonald’s, which in 2017 gave employees the option to switch to contracts with guaranteed minimum hours. Most employees chose to stay on flexible terms, but the initiative has been cited as a model for balancing worker protections with business needs.

Opinions were divided, with some business leaders suggesting a longer qualification period and union representatives calling for a shorter timeframe, sources involved in the discussions said. A UK government insider said the three-month proposal was designed to prompt clearer responses from businesses, with more details to come later.

Labour has pledged to impose strict limits on “unilateral flexibility” in the workplace. Proposals include requiring employers to compensate employees for late shift cancellations, and preventing workers from being financially disadvantaged when shifts are cancelled at the last minute. While Labour originally considered a complete ban on indefinite contracts, it backed down after resistance from businesses, particularly in the hospitality and leisure sectors, which argue that contracts offer valuable flexibility to both workers and employers.

The debate over indefinite contracts is part of Labour’s promise to deliver the biggest overhaul of workers’ rights in decades. However, business leaders have expressed concern about the potential costs of the reforms. The Confederation of British Industry reported that only 26% of companies were confident they could withstand the financial impact without hurting growth, investment or jobs.

There have also been tensions within the government over how to handle probationary periods in the new system. Rayner is demanding full employment rights from day one, after a short probationary period, while Reynolds is said to favour a longer probationary period, possibly lasting up to nine months.

The government is expected to unveil a groundbreaking employment rights bill in the coming weeks, as ministers work to reconcile business concerns with their commitment to improving worker protections.