Employment Rights Bill could cause ‘chronic’ overstaffing, Next boss warns

The boss of Next has warned that the Employment Rights Bill may leave businesses “chronically overstaffed”, particularly during seasonal quiet periods.

Speaking at a House of Lords debate on Monday (14 July), Lord Wolfson said plans to ban zero-hours contracts and require companies to give staff a guaranteed minimum number of weekly hours would also be a “wrecking ball” to part-time work.

As part of the bill, zero-hours contracts will be replaced by low-hour contracts, but Lord Wolfson warned this term has not been defined. In light of this, he has put forward an amendment in the House of Lords to define low hours as eight hours a week.

He warned that if low-hours contracts were not defined at eight hours a week, the bill “could significantly exacerbate that problem”.

He said: “To push that number higher would be to take a wrecking ball to the part-time working practices of millions of people in shops, restaurants, care homes, pubs and many other consumer-facing businesses, which, by their nature, have peaks and troughs in demand.

“If an employer successfully implements a system, they will have to offer contracts regardless of whether there is any work for those people going forward.”

He added: “Your lordships will not be surprised to hear that restaurants, shops and pubs simply cannot afford to have the same number of people working in their establishments in February as they have in December. Nor can we take the risk that the extra hours required to cover many different seasonal peaks and sale events become permanent costs for the rest of the year.”

Lord Wolfson also warned that businesses may increasingly turn to temporary staff, rather than offering low-hours contracts.

He said: “If it is not clear who will benefit, it is very clear who will suffer. It will be those who choose part-time contracts, such as parents with childcare responsibilities, students balancing their studies with earning and often taking their first step into employment, carers for elderly relatives or those seeking a transition into retirement.”

Next employs around 20,000 part-time staff, and rather than using zero-hours contracts, hires temporary staff during the busy end-of-season sale period.

The retailer has recently reported a rise in applications for its temporary roles. Lord Wolfson said that so far this year, Next had recorded 61 applicants for each vacancy, up 25% from last year.