Employment Rights Bill

Following the government’s manifesto commitment to end ‘exploitative’ zero hours contracts (ZHCs), the Employment Rights Bill will give certain qualifying workers (including agency workers) the right to be offered guaranteed hours over a defined period. Workers who want to remain on ZHCs will be able to do so.

The Bill’s provisions in this regard are exceedingly complex, with much of it subject to consultation. However, in summary, workers will be given rights to guaranteed hours as well as reasonable notice of shift changes and payments for cancelled, moved or curtailed shifts.

Guaranteed hours

• The new rights will apply to ‘zero’ or ‘low’ hours workers who, during the relevant reference period (likely to be 12 weeks), worked a number of hours that satisfy certain conditions in respect of number, regularity or otherwise.
• The employer will have to, subject to certain exceptions, make an offer of guaranteed hours after the end of every relevant reference period that reflects the hours the worker worked during that reference period.
• Workers will be able to complain to a tribunal if the employer doesn’t make an offer and the tribunal will be able to award compensation based on financial loss, subject to a statutory maximum.
• Secondary legislation will define and elaborate on matters such as the length of the reference period, how the reference period hours are to be calculated, and how to assess whether a guaranteed hours offer reflects the number of hours worked in the reference period.

Shift notice and payment

• The Bill will introduce a right to reasonable notice of a shift a worker is required to work, including the time, day and how many hours are to be worked.
• This duty will apply to workers employed on a ZHC or minimum hours basis, as well as workers who do not have a set working pattern.
• There will also be a right to reasonable notice of any change or cancelled shift. What is ‘reasonable’ notice will depend on the circumstances, but regulations will set out a specific minimum time.
• Employers will have to make a payment to workers each time there is a change to a shift at short notice. Details will be clarified in regulations, but compensation will be proportionate to the cancellation or curtailment.

An amendment to the Bill will allow a collective agreement to contract out from the rights to guaranteed hours and reasonable notice of shifts in their entirety, for both workers (and agency workers, see below). This means that the employer and an independent trade union can reach an agreement that excludes the new rights and replaces them with something else, so long as these new terms are incorporated into the contract. For agency workers, the collective agreement can be with the person who has the contract with the agency worker.

Agency workers

While not included at publication of the Bill, the government was clearly minded to include agency workers within the scope of these new rules. Following a consultation in October 2024, the Bill has been amended so that:

• the obligation to offer guarantee hours to agency workers will fall on the end hirer rather than the agency
• both the employment agency and the end hirer will be responsible for providing an agency worker with reasonable notice of shifts
• responsibility will be placed on employment agencies to pay short notice cancellation or curtailment payments to eligible agency workers
• employment agencies will be able to recover from the hirer the proportion of payments made to agency workers for short notice cancellations, movements or curtailments that reflects the hirer’s responsibility for cancelling, moving or curtailing the shift at short notice. This will only apply where the arrangement between the employment agency and the hirer was entered into before a date two months after the Employment Rights Bill is passed into law and where it has not been modified by them since

These new provisions replace the Workers (Predictable Terms and Conditions) Act 2023 which never came into force and which will be expressly repealed once the Bill receives Royal Assent.