Employment Rights Bill bitesize: zero-hours contracts 

The Employment Rights Bill was published on 10 October 2024, setting out a wide range of ambitious workplace reforms. For an overview of the Bill, see our ‘headlines’ article.

In this series of ‘bitesize’ articles, we look at different key provisions of the Bill in more detail, consider the implications for employers and explain what the next steps will be. 

Zero-hours contracts: what does the Bill say? 

Following the Government’s pledge to end ‘exploitative’ and ‘one-sided’ zero-hours contracts, the Bill introduces a new right to be offered (note, not a right to request) a guaranteed-hours contract for those who work regular hours over a defined reference period. It will apply to those on ‘low hours’ as well as zero-hours contracts, including agency workers. The Government anticipates that the reference period, to be set out in separate regulations, will be 12 weeks. This will be consulted on in due course, along with how hours of work are to be calculated, and what counts as a ‘low hours’ contract.  

The Bill also includes provision for subsequent reference review periods if hours become regular over a longer period of time. Importantly, workers who want to remain on zero-hours (or low hours) contracts will be able to do so, by rejecting the employer’s offer of a guaranteed-hours contract. The contract offered may also be for a limited term, if it’s for a specific task or time-limited event. 

In addition, the Bill provides that workers on zero and low hours contracts must be given ‘reasonable notice’ of changes in shifts or working time, with compensation payable for shifts cancelled, curtailed or moved at short notice. Details of how this right will operate (including the level of compensation) will also be set out in separate regulations following consultation. 

The Government has published a separate Factsheet summarising its proposals in relation to zero-hours contracts. 

What does this mean for employers? 

The provisions in the Bill are complicated and (as currently) will present a considerable challenge for those employers with large numbers of casual, low hours or zero-hours employees – particularly in sectors where seasonal work is necessary for periods of more than 12 weeks. Such employers should look out for further details of the proposals when the consultation is published and consider submitting a response, to ensure their views are taken into account. 

Employers will need to consider whether engaging workers on zero-hours contracts will continue to meet their staffing needs, or whether an alternative recruitment model will be more appropriate in the future. This may depend on what proportion of staff welcome the flexibility of zero-hours and are therefore less likely to accept a guaranteed hours contract. 

What are the next steps? 

The Government has already issued an initial consultation on how the Bill’s provisions on zero-hours contracts should be extended to apply to agency workers. This consultation closes on 2 December 2024, and we are likely to see subsequent amendments to the Bill.  

Regulations setting out the detailed provisions of how the offer of a guaranteed-hours contract will work in practice will be the subject of a separate consultation. The Government has already indicated that most of the provisions under the Bill will not take effect until 2026.