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Ending one-sided flexibility

TUC submission to the consulation on regulations to end one-sided flexibility - reforms of zero-hours and similar contracts
Authors
Tim Sharp
Head of Employment Rights
Emily Pfefer
Policy Lead, Labour Market
Peter Wieltschnig
Policy Lead - Employment Rights & Labour Markets
Report type
Research and reports
Issue date
Introduction

The Trades Union Congress (TUC) exists to make the working world a better place for everyone. We bring together the 5.3 million working people who make up our 47 member unions. We support unions to grow and thrive, and we stand up for everyone who works for a living.

We welcome the opportunity to respond to the government's consultation on Ending One-Sided Flexibility: Reforms of Zero Hours and Similar Contracts.

The Employment Rights Act 2025 represents the most significant upgrade to workers' rights in a generation. Together with wider reforms set out in the government’s Plan to Make Work Pay, these measures offer an opportunity to reset the UK labour market after decades in which insecure work has become increasingly embedded.1

The TUC supports the government's objective of ending one-sided flexibility and creating a labour market that delivers security for workers and supports growth. It has a clear ambition of ensuring that “everyone has the right to have a contract that reflects the number of hours they regularly work”, an “ongoing commitment to protect the integrity of these policies” and to putting place necessary anti-avoidance measures. A high-productivity, high-growth economy depends on workers having secure incomes, predictable working patterns and confidence in their futures. 2

Based on comprehensive analysis of the Labour Force Survey (LFS) 3 , we estimate that there are around 2.5 million variable-hours workers (VHWs) in Great Britain. This includes zero-hours contract (ZHC) workers, agency workers, and other hourly-paid workers whose hours vary.

Such roles have become embedded in the UK labour market. Variable-hours contracts are not being used to fill short-term work. Rather workers are being parked on them for months, if not years. Nearly three-in-four (73.1 per cent) VHWs report being at their current employer for over a year. Over half (56.6 per cent) report having worked there for two or more years. One-in-six (16.6 per cent) report being at their current employer for over a decade. Their employment is long-term, but their contracts leave them vulnerable to their hours, and therefore their incomes, changing or indeed being removed altogether with no notice.

Half (50.0 per cent) of VHWs report working full-time, according to official data. More than eight-in-ten (84.5 per cent) are not in full-time education. For most, flexibility of hours is not a choice. Nor do such jobs comfortably fit around their other life commitments as some supporters of the status quo like to argue. Instead, these jobs are their primary source of earnings. This is supported by polling that shows that most zero-hours workers take on such contracts because it is the only work available or that precarious variable-hours contracts are widespread for their line of work. 4 There is little justification for such jobs offering no security.

Workers on zero- and variable-hours contracts face unpredictable earnings, difficulties accessing housing and credit, challenges balancing work with family responsibilities, and significant stress and uncertainty about their future income. According to recent polling for the TUC, more than half of all workers report not being paid the last time their hours were cancelled. This rose to two-thirds among workers on ZHCs. 5  Last-minute cancellations and changes to shifts transfer business risk from employers to workers, leaving working people to absorb costs that should be borne by employers. These practices undermine workforce retention, morale and productivity and damage workers’ mental health. 6 Just under a third (30 per cent) of people in work who have had to use a food bank are in insecure work such as zero hours contracts or agency work. 7 Variable pay also causes problems with Universal Credit claims and can lead some workers into debt. Moreover, these approaches allow some employers to compete through insecure employment practices rather than investment and innovation - and they undercut those with good employment practices.

VHCs also further distort power dynamics in the workplace. Participants in a study of zero-hours workers by the Work Foundation described being afraid of making their shift manager upset for fear of retribution, such as the loss of future shifts (and therefore income). The power imbalance inherent to their contracts also contributed to workers feeling pressured to accept last-minute shift requests, cancellations or changes. Participants also reported that their ZHC empowered their employers to act in an unprofessional manner, including with frequent out of hours contact, or infringe on their wider rights, for example limiting their ability to take breaks or time off. 8 In some cases the use of such contracts facilitates abusive behaviour, such as demands that workers exchange sexual favours for work. 9

Workers themselves are clear that they want greater stability. Most insecure workers say they would prefer stable hours, with TUC polling showing that over 80 per cent of ZHC workers want consistent schedules with optional overtime. One third of people on a ZHC had asked for guaranteed hours but had their request turned down by their employer, against 9 per cent who had been successful, and the remainder hadn’t asked. 10

The impact of insecure work is not felt equally across the workforce. Women, Black and minority ethnic (BME) workers and other groups that already experience labour market disadvantage are disproportionately represented in forms of insecure employment. Reforms that reduce insecurity therefore have an important role to play in tackling persistent inequalities in the labour market. 11

The problems addressed by this consultation are particularly acute in sectors with high levels of casualised work, including social care, hospitality, and the retail workforce. In many of these sectors, workers routinely experience fluctuating hours, short-notice scheduling and cancelled shifts, despite regularly working patterns that justify contractual guarantees.

The government has made its ambitions for these reforms clear in its Plan to Make Work Pay. They are central to its mission to improve growth. As the Labour Party’s manifesto stated: “Labour is committed to creating jobs that provide security, treat workers fairly, and pay a decent wage.” Therefore, central to the success of these reforms will be whether they improve security for workers in the sectors where insecure work has become most entrenched.

The TUC welcomes the introduction of new rights to guaranteed hours, reasonable notice of shifts, and compensation for shifts that are cancelled, moved, or curtailed. However, the success of these reforms will depend on robust implementation.

The TUC strongly advocates for the hours threshold for eligibility to be set at full-time contracted hours, if one is set. The graph below shows that setting it below this leaves many workers unprotected and risks distorting the allocation of shifts.

Notes: Variable-hours workers include zero-hours contracts, agency workers, and those whose hours vary and are paid hourly. Usual weekly hours (excluding overtime) has been used as a proxy to estimate contractual weekly hours, but assuming those on zero-hours contracts have a proxy value of zero.

We strongly agree with the government’s proposal to include agency workers within the scope of the new rules. We think that agency workers must be included on a basis that should mirror protections applying to directly engaged workers. Agency work should not become a route through which employers can avoid providing security and predictability.

On top of this, compensation for shifts cancelled, moved or curtailed at short notice must fully recompense workers for the losses they suffer. Workers should not bear the financial consequences of fluctuating business demand or poor workforce planning. Business risk should remain with businesses, not be transferred onto workers.

The TUC is concerned that the consultation paper raises the prospect of a vast range of potential loopholes that an unscrupulous employer could exploit. These include:

  • The hours threshold for a guaranteed hours contract

  • The regularity test for weeks worked in a period

  • The regularity test for hours worked above contracted hours

  • Exemptions for temporary need

  • Ability for employers to offer contracts that differ from a worker’s normal working pattern.

  • An adjustment margin for guaranteed hours

  • Exclusion of certain workers from the right to guaranteed hours

  • Exemption for employers from the guaranteed hours duty in certain circumstances

  • Potentially different regimes for directly engaged and agency workers

  • Subsequent reference periods that could be longer than the initial 12-week one

  • Gaps between reference periods

  • An hours threshold for reasonable notice

  • Ability for shorter notice to be given in some circumstances

  • Potential exemptions for some hirers from reasonable notice

  • Compensation payments that are less than the wages a worker was due by being based either on minimum wage rates and/or only provide for a percentage payment

  • Circumstances allowing exceptions to short-notice payments

  • Certain hirers being exempt from short notice payments

A framework full of loopholes will offer little real protection to insecure workers. It will leave many subject to huge swings in hours and income and with extremely limited capacity to bargain for improved pay and conditions. The regulations developed through this consultation must set robust standards. If not, they will fail to establish a meaningful baseline of security at work, raise standards across the labour market and support the government's goal of building a stronger and fairer economy.

Although it is not addressed in this consultation paper, to aid effective implementation of these measures, we urge the government to put in place new support for unions and employers, especially in sectors where the use of insecure contracts is widespread. Successful introduction will depend on managers, as well as workers and their union reps, fully understanding the legislation and being supported to put it into practice.

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