Legal: Employment Rights Bill

The new Employment Rights Bill, which received royal assent in December last year, will introduce most of its significant changes over this year and 2027. From the bill, there are three key rights for zero-hours workers:

1. The right to be offered a guaranteed-hours contract
If workers have regularly worked a certain number of hours over a certain period of time (which the government has said is likely to be 12 weeks), employers will be obligated to offer them a guaranteed-hours contract. Seasonal spikes, such as summer or Christmas, when demand for workers is temporary, will likely be recognised as legitimate exceptions to this obligation. However, as the 2027 implementation nears, further clarity on exemptions will be needed.

Importantly, employees won’t be forced into these contracts. Therefore, if someone prefers flexible hours, they can decline. But should they decline, the obligation to offer a new guaranteed hours contract will arise again if the same conditions are met.

2. The right to reasonable notice of a shift
Businesses have historically relied on short notice shift changes to fill staffing gaps. Employers are not under any current obligation to give a specific period of notice unless they have set out a specific period in their contractual terms. 

The new legislation will introduce a legal requirement for ‘reasonable notice’. What counts as reasonable remains undefined, although the government has said it will not exceed seven days, so business owners must closely monitor forthcoming developments.

3. The right to reasonable notice of shift alterations or cancellations
This right comes with two components:

• Advance notice: Staff must receive adequate warning before shifts are shortened, moved or cancelled.
• Compensation: Workers will be entitled to compensation if the required notice is not given.

For example, if a weekend shift is cancelled with insufficient notice, the employee will be entitled to compensation. What the required notice will be, what compensation will be payable and the exceptions to this requirement are yet to be clarified.

Regarding zero-hour contracts being banned, there is no discussion of this happening. Flexibility in the workforce has always been recognised as a real driver of economic growth, but the new rules are aimed at addressing what is seen as one-sided flexibility.

What should employers do now?

1. Audit your staffing model.

Review your flexible workforce: who relies on casual or zero‑hours contracts, and why?

2. Map peak-demand periods

Identify times where flexibility is essential versus where hours could be regularised.

3. Stay informed

Keep abreast of government updates and legal guidance, especially around exemptions and definitions. The government has announced that it will start consultation this autumn on how the new rules will work.

4. Avoid overhauls prematurely

It is too early to know exactly how the changes will affect your business, as many key details of the new rules have yet to be clarified. However, there’s no doubt that in future zero-hours contracts will come with a host of new obligations. Therefore, it is a good idea to start thinking about areas of your business where flexibility is essential and those where you may have scope to move to more settled arrangements.

These reforms represent a significant shift for business owners. Zero‑hours workers, including agency workers, will gain stronger protections and employers will face new obligations. While flexibility will still be available for those who want it, businesses must be ready to formalise hours, provide proper notice, and compensate where shifts are cancelled or changed at short notice. Business owners who proactively review contracts, update policies and maintain compliance awareness will be best positioned for a smooth transition this year and beyond. Penalties for non-compliance with the new rules have yet to be clarified.

Please go to Citation for more info.

You may also be interested in…