Guaranteed hours plan risks workers’ opportunities and conditions as well as growth, warns REC

The costs and complexity of the ‘government knows best’ approach taken to guaranteed hours rules will hold back hiring at a critical time for workers, companies and the UK economy, warns the Recruitment and Employment Confederation (REC), as the government’s consultation on the proposal closes this week.

The REC is urging the government to rethink its plans, taking a simpler and more targeted approach, including exempting genuinely temporary workers from the proposals to avoid loss of opportunities and a boom in false self-employment.

Neil Carberry, REC Chief Executive, said:

“The government’s current plan takes a hammer to the two-way flexibility that has helped Britain have high employment, high in-work progression and a better record on the share of income that goes to wages than most major countries. To damage this is not just challenging to businesses – it is bad for workers.

“Unless government and unions come to the table with businesses to redesign these powers, the ultimate losers will be the people that it is claimed this change will protect. Firms do not want to derail the government’s agenda – we want to make it work. That requires proper discussions about how this change happens and an exemption for genuinely temporary work, including agency staffing.

“Temporary work exists because employers face short-term, seasonal or unpredictable demands. Firms can choose to meet that demand in many ways – including overtime and overseas supply, or to leave growth that they cannot meet sustainably on the shelf. Preserving the impetus for firms to offer flexible work when they cannot justify a full-time, directly employed job is critical to getting that work done, and more people into work. This is especially important given the role temporary work plays in supporting young people in starting their career.

“Government needs to remember that the unions who are pushing this agenda have few members among the private sector workforce they claim to be protecting, especially among agency staff in the private sector. Agency work is well regulated, and the risk these workers face is from firms offering fewer shifts, or – as we are already seeing – some firms trying to claim jobs are self-employed, which would take away rights these workers already have.”

The danger is that businesses respond to higher costs and greater complexity by hiring less. This reduces routes into work for people who value flexibility and otherwise might not be able to work. The result is likely fewer good jobs in the regulated labour market and more workers pushed towards arrangements with weaker protections, such as fake self-employment.

Across the private and public sectors, employers increasingly rely on flexible workers to respond to changing demand in an uncertain economic and political environment.

Likewise, flexible work enables many people to balance employment with study, caring responsibilities, health conditions and other commitments. But that is at risk if the ‘government knows best’ approach makes temporary work too costly or complex for employers and hirers, reducing the availability of flexible jobs that many workers value.

Neil Carberry said:

“The government’s own analysis estimates employer costs of up to £2.9 billion a year from the guaranteed hours proposals. This is money that could have paid for 137,000 full-time 18 and 20-years-old on national minimum wage.”

REC's Voice of the Worker research demonstrates the value agency work provides to those who choose it. Nearly eight in ten temporary agency workers (79%) say their work meets an important need for flexibility, while more than half (53%) believe it is the right type of role for their current stage of life. More than two-thirds (68%) also report that agency work offers a better work-life balance.

Neil Carberry said:

“The financial impact of implementing guaranteed Hours could have severe implications for the viability of many businesses and the UK’s economic growth. Ministers are asking employers to absorb costs of up to £8 million a day when employment costs are already high and the labour market needs strengthening. Now is not the time to pile more burdens onto businesses in such uncertain economic and geopolitical times. The impact will not stop at private sector workplaces because the NHS, schools and other public services depend on flexible staffing to respond to changing demand – and government must not make that job harder.”

Notes to editors

Working in flexible ways has skyrocketed in popularity over the past decade, with REC data showing around a million temps and contractors working every day in the UK. Even today, REC data shows employers continue to recruit temporary workers while demand for permanent staff has weakened.

Click here to view all REC press releases and for more information and interview enquiries, contact the REC Press Office on 020 7009 2157, 020 7009 2129 or pressoffice@rec.uk.com. Outside of regular office hours, please call 07985 444 926.

The REC is the voice of the recruitment industry, speaking up for great recruiters. We drive standards and empower recruitment businesses to build better futures for great candidates and themselves. We are champions of an industry which is fundamental to the strength of the UK economy.

Find out more about the Recruitment & Employment Confederation at www.rec.uk.com.