Zero-hours ban could cost employers billions, minister concedes

The government's plan to ban exploitative zero-hours contracts could cost British firms up to billions of pounds a year, a minister has acknowledged.

The BBC reports the upper estimate at nearly three billion, while the Independent puts it at three billion. The cost arises from requiring employers to offer guaranteed-hours contracts to workers who have worked regular patterns for a qualifying period. The policy is part of Labour's employment rights package, which aims to end what ministers call one-sided flexibility that leaves workers with unreliable incomes.

The long view: zero-hours contracts barely existed in British law before the nineteen-nineties. The category was created by case law interpreting what counted as employment, rather than by statute - the mechanism is judicial interpretation filling gaps Parliament left open. The contracts themselves are mutual-zero-hours agreements: the employer promises no work, the worker promises no commitment. That structure gives the employer all the flexibility and the worker all the risk. The ban attempts to reverse that asymmetry once a pattern of work establishes itself.

What to watch: the detail of the qualifying period and what counts as a regular pattern. The tighter the threshold, the higher the cost and the stronger the protection. The looser it is, the cheaper for employers and the easier to game.