Situation before reforms under the Employment Rights Act 2025
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 low 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 low 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 Act aims to tackle one-sided flexibility by changing the way that zero hours and low hours contracts operate.
The Act will also ensure that workers get reasonable notice of shifts and any changes to them.
The new rules will apply to agency workers too.
Many elements of the new regime will be contained in regulations, following a Government consultation which will close on 25 August 2026.
Low hours threshold
The Government is consulting on the threshold for low hours contracts for guaranteed hours and for reasonable notice for shifts, with options ranging from eight hours to 48 hours a week (the Government’s preference being between eight and 20 hours a week). The Government consultation suggests the thresholds could be aligned across both new obligations.
Guaranteed hours
It is expected that from 2027 employers will have a duty to offer zero hours and qualifying low hours workers a guaranteed hours contract that reflects the hours they usually work in a reference period.
The Government is consulting on the length of the reference period (with its preference being 12 weeks). The Government consultation also considers whether the calculation method for the guaranteed hours should be based on the mean or median hours worked in the reference period.
Regulations are likely to 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. However, these issues are not covered in detail in the current consultation.
The Act states that the duty to offer guaranteed hours does not arise where a limited-term contract is reasonable, such as when a worker is needed for a specific task or until a particular event or for a ‘temporary need’. The Government consultation asks whether ‘temporary need" should be defined to cover seasonal demand.
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 Government is also consulting on the length of subsequent reference periods, which will trigger a new assessment of whether a guaranteed hours offer is due, and if there should be a gap between reference periods.
It will be possible for a collective agreement to disapply the right to guaranteed hours.
Regulations will set out the maximum award for failure to comply.
Reasonable notice for shifts
It is expected that 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.
The Government is consulting on whether the starting point for the notice that will be considered reasonable notice should be one week, two weeks, three weeks or four weeks (‘presumed reasonable notice’). If less notice is given, the employer will need to show that notice was reasonable in the circumstances. The Government is seeking views on the factors a tribunal should consider when deciding whether it was reasonable to offer shifts with less notice.
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 Government is consulting on the short notice period, with options of one, two, three, five, or seven days, and whether to introduce a ‘very short period’ which will trigger a higher payment. The Government is consulting on whether the payment should be a percentage of the worker’s actual expected earnings for those hours or of the applicable National Minimum Wage for those hours, and on what that percentage should be (between 10% and 80%).
It will be possible for a collective agreement to disapply the right to reasonable notice for shifts and changes to shifts.
Agency workers
The Act will give similar protections to agency workers, to stop businesses from using temporary staff to avoid the new rules. (This follows a Government consultation in 2024 on the application of zero hours contracts to agency workers.)
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.
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. The Government consultation asks for views on a shorter threshold for presumed reasonable notice for agency workers, including an option for below five days.
The collective agreement contracting out provisions in relation to both guaranteed hours and notices of shifts (see above) can also cover agency workers.
What you need to do
The timing of some of these actions will depend on when the detail of the new laws is finalised and when the changes come into force. However, you can start to plan now:
- Review what sort of contracts you use to manage variations in workload or demand (i.e. flexible labour). For example, do you use zero hours contracts, low 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 low hours contracts?
- 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? 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 we can help
The Employment Rights Act reshapes how employers manage flexible labour, shift planning and short-notice changes. Guaranteed hours and notice requirements will require better visibility, stronger systems and more deliberate workforce planning.
Our HR and legal experts can help you assess where flexibility is genuinely needed and how to retain it lawfully. We can support you with:
- Flexible labour audit: Reviewing how zero hours, low hours, agency and other flexible contracts are used across your organisation and potential areas of risk.
- Guaranteed hours readiness: Helping you assess which workers are likely to qualify for guaranteed hours and how this may affect workforce planning and cost.
- Workforce planning and contract strategy: Supporting decisions on whether different contractual models may better suit future demand and operational needs.
- Shift notice and cancellation processes: Reviewing how shifts are scheduled, changed and cancelled, and helping you design processes that meet new notice requirements.
- Record-keeping and systems support: Helping you put systems in place to track working patterns, reference periods and notice given for shifts.
- Agency worker arrangements: Advising on responsibilities between hirers and agencies and how to manage guaranteed hours and notice obligations in practice.
- Union and representative engagement: Supporting discussions with unions or employee representatives where collective agreements may be used to contract out of new requirements, supported by targeted training such as Conducting Workplace Negotiations and Working Successfully With Trade Unions.
Additional support and resources
Stay informed and prepared by signing up to our email updates, where we’ll share confirmed changes and key dates as they come into force. Members can access up-to-date guidance, template policies and letters in our HR & Legal Resources section, and our expert team is on hand to answer questions or provide practical support, whether or not you are a Make UK member. You can also contact our ERA enquiry line.
To see the planned changes at a glance, download our free Employment Rights Act planner for clear timelines and practical next steps. If you’d like a deeper insight, ask about our Audit and Impact Assessment - a structured review to help you understand your levels of risk, prioritise actions and plan with confidence.