Zero-Hours Contracts

The Government is committed to tackling one-sided flexibility, whereby workers bear the financial risks of business caused by poor workforce planning.  It proposes to do this by ending exploitative zero hours contracts, not by banning them, but by introducing a right to guaranteed hours after a set period, a right to be given reasonable notice of shifts and a right to a payment when shifts are cancelled or changed at short notice.

The provisions in the ERA 2025 set out a framework as to how these rights will apply with much of the detail still to be set out in regulations.

Broadly the Act creates a right to be offered a guaranteed hours contract (GHC) which must reflect the hours a qualifying zero-hours worker regularly worked over a specified reference period.  

The right applies not only to workers (including agency workers) who work for an employer on a zero-hours contract but also workers who work more than the guaranteed hours in their contract, but equivalent to or below a specified number of hours (the low hours threshold) which will be set out in regulations. Workers who work above the low hours’ threshold will not qualify for the right to a GHC.

The way in which the reference period and the low hours threshold are defined in regulations will be crucial in determining which workers will qualify for the right to a GHC. The higher the hours threshold the more workers fall within scope. On 2 June 2026, the Government launched a consultation on

  • The low hours threshold
  • The reference period
  • What amounts to “regularly worked” during the reference period
  • How the guaranteed hours will be calculated

When the hours threshold for low hours workers was debated at committee stage prior to the Act coming into force, the then Minister for Employment Rights suggested that all those working below full time hours would fall within scope. Whilst there would always be a debate about what would amount to full time hours, the Government has “rowed back” from this position stating in the consultation that its preferred option is to set the threshold “within the range of 8 to 20 hours per week”. According to analysis by the TUC if this was set to 20 hours this would exclude 1.1 million workers from protection.

The consultation confirms the government prefers a 12 week reference period to assess the hours a qualifying zero-hours worker regularly worked and the hours worked above the contracted hours for a low hours worker which forms the basis of the GHC. The employer is required to make a guaranteed hours offer to a qualifying worker after the end of every reference period until the worker no longer satisfies the definition of a qualifying worker. It had been understood that all the subsequent reference periods would be the same as the first. However, the consultation seeks views on whether there should be a gap between reference periods and if the subsequent reference periods should be longer than 12 weeks. As the reference period determines the GHC, a long gap between reference periods would not only delay the ability of a qualifying worker to gain a GHC based on their recent working pattern but, also mean that employers could “game the system” by using the gaps to require workers to work longer hours as the Government proposes work during the gaps does not count. This could reduce the prospect of a qualifying worker being offered a GHC which properly reflects the hours worked in any subsequent longer reference period suggested to be 26 or 52 weeks 

As regards determining what hours are regularly worked during the reference period, the Government proposes to assess this either over the weeks worked (for example 8 weeks, if that was the number of weeks worked in a 12 week period) or assessed over the weeks worked but subject to a specified number of hours being worked.

In addition, the consultation proposes some exceptions (where employers can exempt certain workers from the requirements) and exclusions (where the employer as a whole is exempt from complying with the regulations). Both the exemptions and the exclusions risk significantly undermining the regulations.

Although not part of the consultation, there is still an option for an employer to opt out of the provisions altogether if they enter into a collective agreement with the Union, provided the terms of any collective agreement are incorporated into individual contracts of employment. This provides the best opportunity for Unions to negotiate a system of guaranteed hours that bests suits the needs of their members according to the sector in which they work (e.g., retail, care etc.).

The provisions are due to come into force during 2027, following the consultation which ended on 25 August 2026 and the passing of further regulations.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

Visit our main Employment Rights Act Hub for further information.