UK business groups are warning that a planned ban on zero-hour contracts could trigger substantial job losses. Industry leaders representing retail, hospitality, and food manufacturers sent a letter to Business Secretary Peter Kyle, arguing that requiring guaranteed hours could be a "tipping point" in an already weak labor market, potentially forcing employers to cut positions or shift toward gig workers.

The Employment Rights Act provision, set to take effect in 2027, would grant workers the right to contracts reflecting their regular hours. Business groups argue the 12-week threshold is too rigid and should extend to six months or a year to better accommodate seasonal fluctuations. Union leaders counter that people need security to plan their lives.

Ministers face increasing pressure as they implement worker protections amid rising youth unemployment and concerns that recent payroll tax increases have already hurt jobs in low-wage sectors. The government defended the measure, stating it provides certainty for more than half the UK workforce.