Zero-hours contract reforms: Government launches consultation

Right to guaranteed hours

Qualifying workers will have the right to be offered a guaranteed contract reflecting the hours they regularly work over a reference period (which is expected to be 12 weeks, as discussed below). However, workers can still choose to remain on a zero-hours contract if they prefer to.

To be a qualifying worker, the worker must:

• be engaged on a zero or low hours contract;
• have contractually guaranteed hours which fall below a specified “hours threshold”;
  • The threshold options range from 8 to 48 hours per week in the consultation, though the Government’s preference is that the threshold should be set somewhere between 8 to 20 hours.
• have worked more than their contractual hours during a “reference period”;
  • The Government’s preference is that the initial reference period should be 12 weeks, though the consultation seeks views on whether the period should be 26 weeks, 52 weeks or an alternative period;
  • The consultation also seeks views on whether subsequent reference periods should run consecutively or with gaps. Wherever the Government lands on this will of course affect employers’ record-keeping and administrative burden.
• have satisfied the “regularity requirement” (this is how “regularly” the worker must have worked during the reference period to qualify for a guaranteed hours offer);
  • the Government is seeking views on whether the regularity requirement ought to be just a weekly requirement, or both a weekly requirement and minimum number of hours above their contractual hours requirement.
• not be an excluded worker (i.e. a seasonal worker or temporary need worker, please see further detail below).

If a qualifying worker satisfies the above requirements, the next question is how the guaranteed hours to be offered should be calculated. The consultation asks whether the guaranteed working hours should be calculated using a mean average, where every hour worked counts equally, or a median average, which places less weight on unusually busy weeks or weeks with no hours and is therefore more reflective of a typical working week.

Seasonal or temporary need workers

The Government has said that employers will not need to offer guaranteed hours contracts to workers on limited term contracts, where the term is less than the reference period (discussed above), provided the limited term is reasonable. The ERA 2025 classes a limited term as reasonable if the worker is needed for either:

• a specific task;
• until a particular event occurs; or
• for another “temporary need” as defined in regulations.

The consultation seeks views on whether there are any other circumstances in which employers may need to engage workers on limited term contracts, or whether limiting the reasonableness of such contracts to a “specific task” or until a “particular event occurs” would be sufficient to meet the needs of employers that hire seasonal workers.

Compensation for cancelled, curtailed or moved shifts

Eligible workers will be entitled to a “short notice payment” if shifts are cancelled, curtailed or moved at short notice and it is proposed that the short notice period cannot be greater than seven days’ notice.

The consultation seeks views on whether the short notice payment should be calculated as a percentage of the worker’s actual earnings for the relevant hours, or as a percentage of what the worker would have earned for those hours at the applicable National Minimum Wage rate. It also asks what that percentage should be, with options ranging from 10% to 80%. The Government proposes that the Fair Work Agency will enforce non-payment of short notice payments.

It should be noted that employers will not be liable to make a short notice payment where cancellation, movement or curtailment is initiated by the worker.

Next steps

These reforms will be delivered in phases so that employers, businesses and workers in England, Wales and Scotland have time to plan and prepare.

The consultation invites employers for their views on how these new rights are to be implemented in practice. It is open until 25 August 2026 and the link is below for your reference.

Open consultation: Make Work Pay: ending one-sided flexibility – reforms of zero hours and similar contracts

For further information on the ERA 2025, please visit the dedicated area of our Employment Rights Act Hub, which tracks the implementation of the Act. It contains a range of articles and a detailed timeline to help you stay informed about this landmark piece of legislation.