Swinney urged to oppose ban on zero hours contracts – Daily Business

Neil Carberry: increasing costs

A recruitment trade leader has urged the Scottish government to oppose the proposed abolition of zero hours contracts.

Neil Carberry, chief executive of the Recruitment and Employment Confederation (REC), has written to First Minister John Swinney to express the sector’s concerns and is calling for a “robust response” from the Scottish Government.

The UK government says such contracts are “exploitative” and that its Employment Rights Act makes companies provide a baseline of security and predictability for staff.

But employers say it would require companies to offer contracts that match typical working patterns, based on a 12-week period, for staff on zero hours or flexible arrangements. They say it will either force up costs or make them less willing to hire staff

In his letter to Mr Swinney, seen by Daily Business, Mr Carberry says: “We are particularly concerned about the guaranteed hours proposals, on which the UK Government is expected to consult shortly.

“A robust response from your Government to this would be timely, given the potential it has to reduce employment opportunities across Scotland.

“Across sectors, concern is growing that a one-size-fits-all approach risks reducing labour market flexibility at precisely the wrong time.

“If implemented too rigidly, guaranteed hours measures could increase costs and complexity for employers, reduce hiring and limit flexible opportunities relied upon by many workers, particularly in sectors with fluctuating demand.

“It is vital that any reforms strike the right balance between security and flexibility, protecting good jobs while ensuring businesses can continue to create opportunities and support economic growth.”

Mr Carberry is urging ministers to allow employers to assess patterns over six to 12 months, arguing this better reflects seasonal demand and project cycles.”

REC represents the UK’s recruitment industry, a sector larger than both law and accountancy, contributing more than £41 billion to UK GDP each year. There are 101 REC members headquartered in Scotlahd, with a further 223 operating branches across Scotland, collectively contributing more than £1.5 billion to the Scottish economy each year.

Its Scottish Manifesto for Growth calls for, among other things, regulation for a sustainable and dynamic labour market, and action to boost productivity and reduce inactivity.

The head of Next has also expressed his concern over th ban on zero-hours contracts from next year, saying it would make hiring more difficult.

Conservative peer Lord Wolfson has said that government policies have added £70m to its wage bill. He called on the government to reverse its hike in the rate employers have to pay in National Insurance, along with minimum wage rises.

“Youth unemployment is really a symptom of wider problems with employment in the economy, and of course, if you’ve got fewer jobs, the people who suffer most are the people with the least experience and that is the youngest,” he said.

The company was increasingly using automation and other technology, such as self-scanning lockers for customers to return items instead of having staff on tills.

There are growing concerns over the number of young people not working. Latest figures show the unemployment rate for 16 to 24-year-olds is 16.2%, the highest since last 2014, and more than three times the rate of general unemployment at 5%.

A Treasury spokesperson said increasing the national minimum wage boosted pay for more than 200,000 young workers, and pointed out that employer national insurance contributions were lower when hiring under-21s.

“Cutting wages for the lowest paid during a time of global uncertainty is not the answer,” the spokesperson said, adding a £2.5bn youth employment support package would “deliver a million opportunities across the country”.

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