BRC hits back after Government reveals £3bn cost of zero-hours ban

The British Retail Consortium (BRC) has called on the Government to abandon its plans to ban zero-hour contracts after new Government figures revealed the move could cost businesses up to £3 billion.

The Government has said the change, which would guarantee workers’ hours, would “support growth through improved worker wellbeing.” However, documents released on Wednesday show ministers also acknowledged that it would make it harder for companies to respond to shifts in demand and would “increase administrative costs and reduce flexibility” for employers.

Subscribe to TRB

The Government further admitted that the direct cost of the move to businesses, which also includes reasonable notice of shifts and compensation for cancellations, could reach £2.9 billion.

Responding to the publication of the Government’s Guaranteed Hours cost analysis, BRC chief executive Helen Dickinson, said: “The scale of these costs raises serious questions about whether the Guaranteed Hours reforms will actually deliver value for workers, with the cost to employers appearing hugely disproportionate to the benefits for employees.

“These estimates also only tell part of the story, as retailers will have to fork out hundreds of millions of pounds to update their HR and payroll systems.

“These costs could not come at a worse time. Retailers have already been forced to make difficult decisions following the £6.5 billion increase in employment costs over the past two years from higher National Insurance Contributions and the National Living Wage, on top of the additional costs businesses will face from other measures in the Employment Rights Act.

“Adding further costs when youth unemployment is soaring risks being a hammer blow to young people’s job prospects, at precisely the time businesses across the country need to be creating more opportunities.

“The Government should focus on tackling genuinely insecure work without punishing responsible businesses or undermining the availability of the flexible jobs that so many workers value.”