Zero hours and low hours workers

Individuals will have a right to a guaranteed hours contract that reflects the hours eligible employees regularly work over a reference period. Workers will also be entitled to reasonable notice ahead of any changes made to their working hours and compensation if their shift is cancelled or ended later.

Implementation Status

• Part of the Employment Rights Bill
• Subject to consultations ( a consultation on its application to agency workers closed December 2024).
• "Many reforms" in the Employment Rights Bill will not come into force until 2026.

Action

• These provisions are complex, and employers will need to consider carefully the detail which will be fleshed out in regulations.
• Businesses should audit and assess their use of zero hour and low hour workers in light of this proposal and the further detail as and when it becomes available. The position on genuinely short-term contracts and seasonal workers is currently unclear.

In detail

Guaranteed hours contract.

• Zero hour and low hours workers, who have worked a certain number of hours over a "reference period" will have a statutory right to be offered a contract with guaranteed hours. The meaning of a 'low hours worker', the qualifying number of hours to be worked and the reference period will be defined in regulations. The Next Steps paper suggests a possible reference period of 12 weeks.

• The contract offered must meet certain criteria including the proposed working days and hours reflecting the working hours over the reference period. The terms of the offer should also not be less favourable to the worker e.g. making an offer on a lower rate of pay. Where an offer is not made or is made incorrectly, a worker will be entitled to bring a claim for compensation in the tribunal.

• There is no obligation on a worker to accept an offer of a guaranteed hours contract.

Reasonable notice of shifts

• Employers will be required to give zero hours and low hours workers reasonable notice of shifts and changes to shifts with a right to compensation where late notice is given. Regulations will set out the minimum notice that must be given.
• Where an employer cancels, moves or curtails a shift at short notice it must make a payment of a specified amount to the worker. An amendment to the Bill proposed at Committee stage proposes that awards should be based around a tribunal's view of the "seriousness of the matter". It is expected that further regulations will set a maximum cap.
• A breach of any of the notice or payment requirements will give rise to a tribunal claim for which compensation may be awarded.
   

Other

• The government has also proposed anti-avoidance measures in the Employment Rights Bill.
• The measures will also be adapted and applied to agency workers and this is currently being consulted on.

Impact

• The government wishes to ensure that all jobs provide a baseline of security and predictability. However, it also recognises that zero hours contracts can work well for some individuals, such as students and those with caring responsibilities. By providing for "reasonable notice" of any chances, cancellations to shifts etc, the government hopes that this will give people a greater ability to plan their lives, without banning flexible arrangements that some workers benefit from. 

• On the current wording of the Bill, the offer of guaranteed hours would need to be repeated after the end of every reference period; this could be administratively burdensome for employers, on top of monitoring working hours within a reference period.

• The government has previously stated that where work is genuinely temporary there will be no expectation on employees to offer permanent contracts. It is currently unclear how seasonal variations will be accommodated.