Trade bodies call on ministers to review zero hours law amendment
Four of the UK’s biggest trade associations have written to the Secretary of State for Business and Trade warning that government proposals for guaranteed hours measures risk harming jobs, hiring and labour market flexibility.
It is a letter from firms that employ millions of workers in sectors severely sensitive to altering consumer demand, and is signed by the British Retail Consortium, Food and Drink Federation, Recruitment and Employment Confederation and UKHospitality.
“We do recognise the government’s mandate to get economic growth back on track, but we think the current approach to guaranteed hours – a key part of the Employment Rights Act 2025 – could have unintended and damaging consequences,” the groups say.
For some months, the British Retail Consortium has been arguing that guaranteed hours should only apply under eight hours.
The idea was condemned by the four trade associations as a “substantial threat to good jobs” and said it might increase employment expenses, legal risks and administrative hurdles for businesses already struggling with rising costs and global instability. The letter cautions these pressures could result in firms cutting back on hiring, reducing available hours or moving away from flexible roles altogether.
“The worry is deep and growing across our sectors that the current approach risks taking flexibility out of the labour market at precisely the wrong moment,” said the letter.
It said badly planned policies might be a “tipping point”, pushing companies towards less secure, more informal kinds of employment and reducing prospects for those who rely on flexible work.
The organisations pointed to specific hazards for young people starting employment, saying that entry-level jobs – frequently a first step into labour – are especially vulnerable. They cited data suggesting that hospitality job ads dropped 5% between February and March 2026, and said that demand in the labour market was already softening. They worried that tougher guaranteed hours restrictions could further reduce access to work at a time of high youth unemployment.
They suggested that flexible workforce strategies are critical in areas such as retail, hotels and food production where demand vary daily and seasonally. This flexibility is needed for many people, such as students and caretakers, to enter the employment market.
The groups are calling on the government to change its approach and provide businesses more certainty. “We want to see the government sending a clear and urgent message to businesses that they should continue to hire with confidence and avoid the double whammy of rising unemployment and fewer young people entering the labour market,” they wrote.
The trade bodies are requesting a number of amendments to the Act in their submissions for the secretary of state. They advised that the reference period for the regular hours assessment should be at least six months, preferably 12 months, to better capture the reality of working patterns. They also called for an acknowledgement that agencies are already heavily regulated and recommended that any additional hours requirements should be managed by agencies and not by end employers.
They also proposed a low-hours threshold of eight hours a week to keep protections targeted and “immediate and meaningful engagement with business groups” to develop the legislation.