Employment Rights Bill | Zero-Hour Contracts

The Employment Rights Bill curbs 'exploitative' zero-hour contracts by ensuring fair hours, proper notice, and compensation for cancelled shifts.

The Government has proposed to put a ban on “exploitative” zero-hour contracts (not abolish them overall), ensuring workers are given the right to be offered a guaranteed-hours contract that reflects the hours they regularly work, based on a set reference period (yet to be defined, however the current proposal is 12 weeks), unless the work is inherently temporary. The aim of these proposals is to “ensure all jobs provide a baseline level of security and predictability, banning exploitative zero hours contracts and ensuring everyone has the right to have a contract that reflects the number of hours they regularly work”.

Under the Bill, these proposals will affect workers on zero-hours and certain (as yet to be determined) minimum hour contracts. These types of workers will be entitled to reasonable notice of shift changes/cancellations and to be compensated if shifts are cancelled or curtailed (likely won't be more than 7 days). This is the employee's choice to accept or refuse the guaranteed hours offer, during a “response period” (to be confirmed). This will be a recurring obligation for employers at the end of every reference period.

The government previously issued brief guidance on these proposals. Further consultation on various aspects of this change will be undertaken, followed by regulations to supplement the details in the Bill. In addition, following consultation at the end of 2024, these provisions will also apply to qualifying agency workers, whereby:

• The obligation to offer guaranteed hours will land on the end hirer.
• The obligation to give reasonable notice of shifts will be held jointly between the agency and end hirer.
• The agency will be liable for any compensation due for failing to give reasonable notice of cancelled, moved or curtailed shifts, although a pre-existing arrangement may allow for the agency to recoup that from the end hirer.

Another notable amendment to the Bill, accepted by Parliament in March 2025, allows for these provisions to be contracted out, provided that this is achieved through a collective agreement with a Trade Union. Importantly, the collective agreement must be documented in writing, specifically state that the new rights and duties are excluded, and clearly set out any alternative duties or rights being introduced in their place. These substituted terms must also be incorporated into employees’ contracts. As a result, the extent to which an employer can opt out of these provisions via a collective agreement will largely rely on what the Trade Union is prepared to accept.

UPDATE - July 2025

On 7th July 2025, the Government published proposed amendments to the Employment Rights Bill, covering both government and non-government suggestions in a 64-page document.

These are currently only proposals and will be subject to consultation before any final decisions are made about their implementation. Notably, the following changes to zero hours work arrangements are not backed by the government and may therefore be unlikely to progress.

What’s Changing?

• The right for zero hours workers would be softened so workers could only request guaranteed hours, rather than automatically being offered them. Employers would only need to consider these requests, similar to the flexible working process.
• The right to request guaranteed hours would only apply if a worker averages at least 8 hours a week over a rolling 26-week period.
• The requirement for employers to pay ‘short notice’ cancellation payments would no longer apply if a shift is withdrawn at least 48 hours in advance.