Trade bodies raise serious concerns over damage to jobs from proposed guaranteed hours policy in joint letter - REC

Four leading trade bodies have told government that plans for guaranteed hours – a part of the Employment Rights Act – will lead to poorer opportunities and conditions for workers.

In a joint letter to the Secretary of State for Business and Trade, the bodies - British Retail Consortium, Food and Drink Federation, Recruitment and Employment Confederation and UK Hospitality - warn the measure is a ‘substantial threat to good jobs’.

In a letter dated 24^th April 2026, they suggest changes to the policy that will avoid ‘the double whammy of increasing unemployment and fewer young people entering the labour market’.

Business groups warn that government risks undoing the flexibility and good employment practice that it has repeatedly praised and which adds to the resilience of the UK jobs market.

The letter says:

“Across our sectors, concern is deep and growing that the current approach risks stripping flexibility from the labour market at precisely the wrong moment. With demand already weakened, poorly designed guaranteed hours measures could become a tipping point, pushing employers to reduce hiring, limit hours or withdraw flexible roles altogether, denying work to those who need it most, or moving to less secure, more casual models of engagement.”

Urging the government to signal a change in policy direction they say:

“To avoid the double whammy of increasing unemployment and fewer young people entering the labour market we would like to see the government send an urgent and clear message to businesses that they should continue to hire with confidence.” 

In the letter, they call on the government to:

• Set the reference period assessing regular hours to be an absolute minimum of six months with a 12-month period most accurately reflecting genuine regularity.
• Acknowledge that temporary agencies already operate within robust regulatory frameworks and so to avoid a drive to false self-employment any additional hours should be determined by agencies rather than end-hirers. The Low Pay Commission noted that other systems – like Ireland – treated agency and temporary cover differently.
• Set the low hours threshold at eight hours so the change remains targeted on those without predictable hours rather than sweeping up workers who don’t need low hours protections and giving workers a right to demand more work where that may not be available.
• Engage in immediate discussion with business groups about the suggested changes to the government’s proposals.

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Notes to editors

1.     The letter is attached to this email.