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UK ban on zero-hours contracts signals win for Gen Z workers

The UK’s Employment Rights Bill is set to ban zero-hour contracts in favour of guaranteed working hours.

A major shift has hit employment law in the UK. Starmer’s Labour government has decided to ban what some may say are exploitative zero-hours contracts, extending protections to both directly employed and agency workers.

The UK’s landmark amendment to the Employment Rights Bill promises greater job security – but has sparked massive debate about the implications for workers and employers alike.

Zero-hours contracts, which offer no guaranteed hours, have long been criticised for enabling undependable work conditions. These can lead to work and financial anxiety for Gen Z and all workers alike.

They are being phased out under new legislation. The government will now require employers to offer guaranteed-hours contracts based on a 12-week reference period creating greater financial stability for workers and allowing them to plan how they spend, save, and ultimately survive.

This is significant for young people who are just learning how to grasp financial literacy in a time of economic regression and a cost-of-living crisis.

Workers may still opt to remain on zero-hours contracts voluntarily but must be formally offered more secure alternatives.

However, some are concerned that workers will be passive aggressively bullied into ‘voluntarily’ staying in zero-hour contracts for the benefit of big corporations and money hungry companies. Especially when considering most people who take on zero-hour contracts are often either looking for flexible work or are strapped for cash.

Critics also warn that the reform could trigger unintended consequences. A CIPD survey of 2,000 employers revealed that 79% expect the bill to increase employment costs, with a third preparing for redundancies or hiring freezes.

On the bright side, for Gen Z – many of whom are entering the workforce for the first time -this change could redefine early career experiences.

Hospitality, retail, and gig sectors, where zero-hours contracts are most common, often serve as gateways into longer term employment for young people. The ban may provide younger workers with more predictable incomes and stability, helping them to plan within a competitive job market.

The social impact of the reform hinges on whether it delivers real employment security or simply reshapes the existing precarity. Advocates such as Unite’s Sharon Graham have hailed the bill as a long-overdue recognition of workers’ rights, praising the introduction of guaranteed hours and protections like compensation for last-minute shift cancellations.

The inclusion of agency workers under the new rules is especially meaningful. Although agency work offers flexibility, experts such as Philip Pepper and Dawn Dickson caution that businesses may struggle to adapt, facing more administrative burdens and legal risks.

Some employers predict that they will be deterred from using temporary staff altogether, hurting sectors reliant on flexible labour.

Will this create less employment for young people, though?

Still, the government argues the bill balances the need for ‘worker protections’ with ‘necessary flexibility’ for businesses. A phased implementation plan and ongoing consultations are promised to ease the transition and allow companies to adjust their workforce management practices accordingly.

For Gen Z, the ban signals a possible turning point: a move toward a more stable and equitable job market. But with economic pressures mounting and employer resistance brewing, the true test of the legislation will be in its enforcement its and real-world impact.

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