The REC has responded to a package of evidence published by the government today relating to reforms of zero hours and similar contracts. Taken together it appears a cost of around £8 million a day could hit businesses through increasing employment costs as the government places curbs on work freedoms.
“We believe this assessment by the government of its reforms around flexible work undercounts the compliance and process costs businesses will face,” says Neil Carberry, Chief Executive of the Recruitment and Employment Confederation. “Even so, a potential £2.9bn addition to the rapidly rising cost of employment will only make our youth unemployment issues worse. The government’s own data suggests the guaranteed hours gamble with the job market will cost employers up to £8 million every day, or roughly the annual wage bill for 137,000 full-time workers between 18 and 20 years old on national minimum wage. This is why concessions that keep agency workers outside the scope of these proposals would mean a multi-million-pound bonus for business growth and will help ensure the job market can deliver more for young people.”
Carberry believe the reforms fail to reflect fluctuating demand, short-term assignments and the real-life relationships between workers, employment businesses and hirers. In this way the reforms undermine the modern demand from people to work flexible hours and for different employers. There is also a risk that burdensome cancellation requirements could reduce the willingness of hirers to engage temporary workers at all.
“Rather than increasing job security, the proposals risk weakening a vital and successful part of the labour market that supports workforce participation, especially in sectors such as hospitality, retail and healthcare, and delivers economic growth,” says Carberry. “We are calling for more talks with government to ensure that any final policy is coherent, proportionate and capable of operating effectively within the realities of the agency labour market.”
