Zero-hours under the Employment Rights Bill

The publication of the Employment Rights Bill is just the starting point for key changes to workers’ rights which are expected to come into force from 2026. Clauses 1-3 of the Bill relate to the Government’s plan to ban exploitative zero-hours contracts.

Background

Under zero-hours contracts, workers are engaged on an ad hoc basis with no guarantee of work. Such agreements are widely used in the UK, particularly in the care, retail, and hospitality sectors, where employers benefit from their flexibility.

Although beneficial to some workers, zero-hours contracts have been heavily criticised in recent years as a means of abusing vulnerable, low-income workers due to providing no job security or guaranteed income.

New rights and protections

The provisions of the Bill relating to zero-hours contracts are complex but, in brief, they introduce the following:

• Clause 1: employers will have to offer guaranteed hours contracts to qualifying workers (certain zero-hours and low-hours workers). This applies to workers who, over a specified reference period, regularly work more hours than those guaranteed in their contracts
• Clause 2: workers will be entitled to receive reasonable notice of their shifts to provide them with more certainty about their working hours
• Clause 3: a right to compensation when shifts are cancelled or changed with insufficient notice.

What will happen next?

The Government has launched a consultation seeking views on extending these provisions relating to agency workers. It is also expected to consult on what will constitute ‘low hours’, which contracts will fall within these provisions, and how the reference and review periods will work.

Many details will need to be clarified further before employers know exactly how these provisions will be implemented.

Comment

Whilst some types of zero-hours contracts will be excluded from these provisions, they will inevitably reduce the flexibility that zero-hours contracts afford employers. There will also be significant financial implications for employers needing to make last-minute changes to shift allocation.

Employers are advised to audit their zero-hours and low-hours contracts and be ready to act once the finer details have been provided.

Employers can also prepare for the changes by reviewing their processes regarding shift allocation. Many employers will likely need to tighten up their scheduling systems to ensure they can provide employees with sufficient notice of shifts under the new rules and reduce the need for last-minute changes.

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