What is the current situation?
Employers can currently offer zero hours contracts with no obligation to provide regular work, to offer a certain number of hours, or to pay for hours not worked. Employers can also offer minimum hours contracts, with no obligation to offer more than that minimum. Such contracts are often used to help manage fluctuations in demand and workload.
When scheduling and varying workers’ shifts, employers should be mindful of regulations governing working time and health and safety, potential indirect discrimination claims, and – if the individuals are employees – breaching trust and confidence. In addition, they must be mindful of any contractual obligations to provide shifts at certain times. Within these parameters, they can schedule, cancel or alter shifts at short notice without compensation.
Similarly, hirers can use agency workers on the equivalent of zero hours and minimum hours contracts, and can schedule, cancel or alter shifts at short notice without compensation, subject to their agreement with the agency.
So what’s changing and when?
The Employment Rights Bill aims to tackle one-sided flexibility by changing the way that zero hours and minimum hours contracts operate and by ensuring that workers get reasonable notice of shifts and any changes to them. The new rules will also apply to agency workers. Many elements of the new regime will be contained in regulations. The Government will consult on these measures in Autumn 2025.
Guaranteed hours
From 2027, employers will have a duty to offer zero hours workers a guaranteed hours contract that reflects the hours they usually work in a reference period and includes information about when the hours are to be worked.
The reference period will be set by regulations and is likely to be 12 weeks. Regulations will also address the specific working pattern or days that must form part of the guaranteed hours offer, the format of the offer and how long the offer should remain open.
These changes will also apply to workers on minimum hours contracts to the extent that they qualify as ‘low hours’ contracts. Note though that the definition of low hours has not yet been decided. It will be contained in regulations.
Workers can reject the offer of guaranteed hours and stay on a zero or low hours contract, but they will still have to be offered a guaranteed hours contract each subsequent reference period.
The Bill will allow a collective agreement to opt out of the right to guaranteed hours.
Regulations will set out the maximum award for failure to comply.
Reasonable notice for shifts
From 2027, employers will be required to give reasonable notice of shifts and shift changes to workers on zero or low hours contracts, workers with no set working pattern and workers who are offered shifts outside their set working pattern. This includes changes to start and end times of shifts.
Employers that cancel, move or alter the length of shifts at short notice (which the worker reasonably believed they were needed for) will have to make a ‘short notice payment’ to the worker. The definition of short notice, the payment and certain exceptions will be included in regulations. The payment will be proportionate to the cancellation or change.
Whether notice is reasonable will depend on the circumstances, but regulations will set out minimum notice requirements, and the factors that a tribunal will rely on to decide if enough notice has been given.
The Bill will allow a collective agreement to opt out of the right to reasonable notice for shifts and changes to shifts.
Agency workers
The Bill will give similar protections to agency workers, to stop businesses from using temporary staff to avoid the new rules.
The hirer will generally be responsible for making the offer of guaranteed hours. If the agency worker accepts the offer, the agency worker will become the hirer’s worker for the purpose of that particular contract. It is likely that regulations will stop hirers from ending an agency worker’s job to avoid offering guaranteed hours.
The hirer must ensure that pay offered to agency workers under a guaranteed hours offer is either no less favourable than the pay they received as an agency worker or no less favourable than the pay of a comparable direct worker.
The agency and the hirer will both be responsible for giving the agency worker reasonable notice of shifts and changes to shifts. Although the agency will be responsible for making the short notice payments, in practice this is likely to be passed onto a hirer where the hirer is at fault.
What you need to do now
- Review what sort of contracts you use to manage variations in workload or demand. For example, do you use zero hours contracts, minimum hours contracts, annualised hours contracts, fixed-term contracts, overtime and/or agency workers? Map out which parts of the business use these contracts and work out if your business needs have changed since you introduced them.
- Review your working patterns against your contracts. To what extent do you actually use the flexibility that is built into contracts such as zero and minimum hours contracts?
- Keep abreast of developments and think strategically about how to manage workload variations and fluctuating demand in the future. How will the requirement to offer guaranteed hours affect workforce planning? Might guaranteed hours make different contractual arrangements more suitable in the future? Might you need to alter the way you use agency workers?
- Check your record-keeping systems are detailed enough for the new legislation, if you are likely to continue with zero or low hours contracts. Make sure you can track working patterns over the reference period (likely to be 12 weeks).
- Audit how much notice you give for new shifts, to change shift times or duration or to cancel shifts. Are there circumstances where you could provide more notice, and what processes would you need to change to achieve this?
- If you have a recognised union, build a positive relationship to boost your chances of entering into a collective agreement to contract out of the new requirements.
How Make UK can help you
Whether you’re already getting support from us or you’re just starting to explore your options, we’re here to help you plan for the Employment Rights Bill changes and protect your business.
Already getting support from Make UK?
You’ll receive updates from us as key legal changes come in, so you can stay compliant and up to date.
Detailed HR and employment law guidance can also be found in the HR & Legal Resources section of our website.
If you’ve got questions, your Make UK legal adviser is on hand to help.
Our HR and legal consultants can also provide hands-on support with any projects as you prepare for these changes. For example, we can help you audit the way you use zero hours contracts as well as other types of atypical contract. We can also analyse working patterns and processes for allocating shifts. We can work with you to identify different ways of managing varying workloads and fluctuating demand as the law changes and help you implement new arrangements.
You can also shape future policy. We speak regularly with Government and feed into consultations, using input from businesses like yours.
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06/08/2025