Employer bodies urge ministers to keep zero-hours reforms simple

Ministers have launched a consultation on "ending one-sided flexibility", looking at the detail of reforms from the Employment Rights Act 2025 relating to zero-hours contracts, reasonable notice of shifts, and pay for cancelled shifts.

In a foreword, business secretary Peter Kyle and Kate Dearden, the employment rights minister, said they recognise the flexibility zero hours contracts can provide, but that the measures will ensure all jobs provide a "baseline level of security and predictability".

They said: "A worker on a zero hours contract could be working 40 hours a week for the same employer for years and still not have any contractual guarantee of how many hours they will get the next day, let alone the next month.

"Workers may only be told in the morning that there is work for them in the afternoon or turn up for a shift only to be told that there is no work, and so no pay, for them at all. This cannot be right."

The consultation covers: initial and subsequent reference periods used to calculate typical hours; the hours threshold where the rules begin to apply; how seasonal work is treated; and how guaranteed hours will be calculated and offered by employers. It covers both directly engaged workers and agency workers.

It also explores what is "reasonable" notice when shifts are cancelled or changed, and how much pay the worker should receive if not enough notice is given.

Ben Willmott, head of public policy at the CIPD, said: "Well-managed zero-hours contracts provide welcome flexibility for employers and people who want to work but cannot commit to fixed hours - including students, carers and those managing health conditions.

"It's really important that there's meaningful consultation on these new rights, including the reference period which will be used to decide the number of guaranteed minimum hours a zero-hours contract worker will be entitled to.

"A longer reference period will be easier for employers to manage, but even with this, the new measures are likely to be extremely complex and challenging to comply with, particularly for small firms or those with fluctuations in demand."

The government's preferred reference period is 12 weeks, but it has provided options in the consultation for 26 and 52 weeks also.

But, said Wilmott, this is only one headache for employers. He added: "The challenge of providing reasonable advanced notice of shifts is also likely to prove difficult and require caveats to allow for issues like sickness absence.

"If the final regulations are too difficult to manage, employers will simply find other ways to achieve workforce flexibility. They are likely to rely more on self-employed contractors and fixed term contracts, for example, potentially resulting in more rather than less insecure employment.

"This would also damage opportunities for young people who particularly benefit from zero-hours contract arrangements because they enable them to balance work while studying."

Union and employer input

Neil Carberry, chief executive at the Recruitment and Employment Confederation (REC), said: "Getting these proposals wrong would be a disaster for workers, with unemployment rising and youth unemployment a particularly worrying challenge.

"It is disappointing that the government has drifted so far from the original proposals agreed by businesses and unions in the Low Pay Commission, towards something that pleases the unions but will damage work opportunities for vulnerable workers, especially those who need flexible work.

"The open questions in this consultation must signal a change of approach towards working in partnership with employers as well as unions. Despite commitments given last autumn, there has been little evidence of government taking business concerns on the cost of employment seriously enough, with predictable results starting to emerge in monthly labour market figures."

Tania Bowers, global public policy director at Association of Professional Staffing Companies (APSCo UK) and OutSource, said: "It is critical that staffing sector businesses from SMEs to multinationals submit their own responses to this consultation, urge their clients and candidates to do so, and contribute to trade association responses."

She added: "Unlike directly engaged workers on zero hours, agency workers already have the protection of worker status and sector regulations including the Agency Workers Regulations, guaranteeing comparable pay and conditions. The staffing sector remains deeply concerned that this controversial reform will lead to even more UK employers turning to offshoring and technological alternatives to hiring, or 'making do' with existing headcount.

"This is an existential threat to temporary contracting as it has evolved over decades and will require significant workforce strategy planning programmes across UK employers of all sizes. Given the existing pressures, particularly on SMEs, and the Department for Business and Trade's own target to reduce administrative burden by 25%, this policy is counterintuitive."

Meaningful change

Alice Martin, head of research for the Work Foundation at Lancaster University, said: "The publication of this consultation marks an important step towards strengthening protections for workers in insecure employment. It is essential that these reforms deliver meaningful change for the growing number of people who lack certainty over their hours, income and working patterns.

"More than 1.2 million workers are now employed on zero-hour contracts - the highest number since records began. The latest figures show their number has increased by 91,000 over the past year alone, while a record 401,000 people now rely on these contracts as their main source of full-time work despite having no guarantee of hours or earnings.

"Many workers have already waited years for these reforms and still face a considerable delay before new rights are introduced. The government should move swiftly once the consultation concludes and provide a clear timetable for implementation. The right to guaranteed hours, reasonable notice of shifts and compensation for late cancellations will be vital in improving security and predictability for workers."