Employment Rights Act 2025

The government is consulting on regulations needed to implement the zero and low hours measures in the Employment Rights Act 2025.

In summary, the Act creates three rights for workers on zero hours and similar contracts covering:

• rights to guaranteed hours
• reasonable notice of shift changes, and
• payments for cancelled, moved or curtailed shifts

Workers who want to remain on zero hours contracts (ZHCs) will be able to do so. There is no actual timetable for the introduction of these new rights – they are simply scheduled for some time in 2027.

The consultation, which runs until 25 August 2026, seeks to put some flesh on the bones of the Act’s provisions.

Right to guaranteed hours

To qualify for the right to guaranteed hours, a worker must be on a ZHC or have contracted hours below a specified threshold. The key issue is what the threshold number of hours for low-hour contracts should be. If a worker is guaranteed at least that number of hours, they will be out of scope for a guaranteed hours offer, even if they regularly work additional hours.

Options being canvassed in the consultation range from 8 hours per week to 48 hours per week, with the government expressing a preference for a threshold between 8 and 20 hours per week as it believes this is the range most likely to balance worker protection against employer cost and burden.

The employer will have to count the number of hours worked by the worker over a ‘reference period’ to determine whether they have exceeded their guaranteed hours in such a way as to trigger the obligation to make a guaranteed hours offer. The government’s preference is for a 12-week reference period. It also seeks feedback on the length of subsequent reference periods and whether they should begin immediately after the previous reference period.

Workers must have worked with sufficient regularity during the reference period to benefit from the right. The consultation offers two options:

• Option A: hours worked during the reference period must be distributed over a specified minimum number of calendar weeks, which would not have to be consecutive.
• Option B: the worker must meet both the weekly distribution requirement and a minimum number of hours in excess of the worker’s total number of contracted hours

The government is considering two options for calculating the guaranteed hours offer: mean or median average hours worked during a reference period. It also asks whether employers should have flexibility to determine how hours will be allocated (weekly, monthly or otherwise).

The government is also consulting on whether employers should be given a small degree of flexibility to use an adjustment margin when making a guaranteed hours offer, for example to better reflect shift patterns.

Agency workers are in scope, with hirers usually liable for guaranteed hours offers, though the consultation explores shifting responsibility to agencies or intermediaries in some cases.

The government is seeking views on whether types of workers should be excluded from the right to guaranteed hours and whether there are any circumstances in which employers should be exempt.

For a thought-provoking comment piece on the above aspects of this consultation, see ‘Is the government serious about guaranteed hours?’ by Darren Newman.

Seasonal work

There is no obligation to make a guaranteed hours offer to a worker who is on a limited term contract that is shorter than the reference period, provided that the limited term is reasonable. A limited term is reasonable if the worker is needed for a specific task, until a particular event occurs, or for another ‘temporary need’ as defined in regulations. The consultation asks for examples of temporary needs that are not related to a specific task or event.

Reasonable notice of shifts

Eligible workers must be given reasonable notice of shifts and of changes to them. Regulations will set a presumed reasonable period as the tribunal’s starting point. Where an employer gives less than that, it must show the shorter notice was reasonable; where it gives more, the worker must show it was not. The consultation canvasses one to four weeks for directly engaged workers, and from under five days up to four weeks for agency workers.

The consultation asks whether the Fair Work Agency should enforce short notice payments via its Notice of Underpayment regime (it will not enforce the right to guaranteed hours and shift notice according to the consultation). The government's preferred option is a penalty at 50% of arrears, minimum £100 per case, maximum £5,000 per worker — set lower than minimum wage penalties to reflect the novelty of the right.

Payment for shifts cancelled, moved or curtailed at short notice

In respect of the right to payment, the consultation seeks views on what timeframe should be regarded as short notice, whether the payment should be calculated as a percentage of what the worker would have earned from working the relevant hours or a percentage of what the worker would have earned from working the relevant hours at the applicable National Minimum Wage rate and what that percentage should be.