What is the current policy/legal framework?
Recent data shows over 1 million people in the UK work on zero hours contracts.1
Flexible hours of work can benefit both workers and employers but without proper safeguards this flexibility can become one-sided, with workers bearing the financial risk. Zero hours contracts can make it difficult for a person to manage their financial obligations and their personal life. The current system allows workers to work regularly for an employer but with no certainty about their future hours and earnings. Employers can offer and cancel shifts at last minute, so that much of the financial risk of changing demand is on their workers. That uncertainty can affect both financial security and well-being.
Policy Intent
The Government is committed to ending one-sided flexibility and exploitative zero hours contracts, ensuring that all jobs provide a baseline of security and predictability so workers can better plan their lives and finances.
Employers who already provide this security and predictability for their workers will benefit from a level playing field. These measures will help drive up standards and eliminate undercutting.
Greater clarity and advance notice of working patterns will help workers by making it easier to organise transport and childcare, and to meet other family commitments and caring responsibilities. The measures are also expected to encourage employers to plan ahead more, meaning that workers do not bear so much of the financial risk.
How will it work?
Right to guaranteed hours
The measures set out in the Bill will require employers to offer eligible workers guaranteed hours reflecting the hours they regularly work over reference period, which will be set in regulations and is expected to be 12 weeks. Individuals will be able to reject an offer of guaranteed hours and remain on a zero hours contract if they wish.
Right to reasonable notice of shifts
The Bill will require employers to provide workers with reasonable notice of shifts.
If an employer schedules shifts with unreasonable notice, the worker can bring a tribunal claim. The tribunal will decide whether the worker was given reasonable notice of the shift. The Government will use regulations to state how much notice should be ‘presumed reasonable’. This will be the tribunals’ starting point. The Government will also set out the factors the tribunals should look at when determining whether the notice was reasonable or not. Such issues will be part of the Government’s consultation on implementing regulations.
Right to payment for shifts cancelled, curtailed, or moved at short notice
The Bill will require employers to make payments to workers if they cancel, move or curtail a shift at short notice.
Agency workers
The Government recognises that due to the complex relationship between an agency worker, agency and hirer, the zero hours contracts rights may need to apply differently to agency workers.
The legislation will maintain flexibility to cater for different circumstances by placing the obligation to offer guaranteed hours on the hirer by default, whilst allowing flexibility to place the obligation on agencies or other intermediaries instead, in certain scenarios. Both the agency and the hirer will be responsible for providing an agency worker with reasonable notice of shifts. Agencies will be required to make short notice payments to agency workers and will generally be able to recoup these costs in situations where the hirer is responsible.
The Government will set out further details in regulations, including the guaranteed hours offer process, the factors employment tribunals will take into account to determine whether a notice of shift is reasonable and what constitutes short notice cancellation. The regulations may apply differently for directly engaged and agency workers.
In developing the regulations, the Government will consult on all of the zero hours contracts measures to inform the details of their implementation.
Key Stats
Analysis of the Labour Force Survey (LFS) from October to December 2024 shows that there are around 1,130,000 people in employment on zero hours contracts in the UK, representing around 3% of all people in employment in the UK.2 Growth in zero hours contracts has stabilised in recent years following significant growth between 2010 and 2016.
Data released by the Office for National Statistics (ONS) suggests that the sectors which rely most heavily on zero hours contracts are hospitality, retail, and health & social care. People working on zero hours contracts are more likely to be young (16-24), female or in full time education.
27% of those on zero hours contracts report that they would like to work more hours, compared to 7% not on zero hours contracts.
Analysis from the Living Wage Foundation (2023) suggests that 59% of variable hours workers receive less than a week’s notice of shifts, with 13% receiving less than 24 hours’ notice.
As of March 2024, it is estimated that there were approximately 900,000 people working in temporary jobs through an agency in the UK, around 140,000 of whom also identify as being on a zero hours contract.3 The Agency Worker Survey (2021) suggested that there is clear demand from agency workers to move onto more secure contracts. 55% of agency workers had requested a permanent contract either themselves or through a third party between January 2019 and September 2020.4
Common questions
Will it still be possible to use zero hours contracts? They work well for a lot of people.
- The Government recognises that some workers need and value the flexibility that a zero hours contract can provide, for example students and people with caring responsibilities. The Government would not want to take away this flexibility for these groups.
- Those who are offered guaranteed hours will be able to turn these down and remain on their current contract or arrangement if they wish.
- The Government also recognises that there are cases where unions and employers working together may want to agree more tailored conditions than the provisions allow, and which would benefit both the workers and the employer, given the unique context of that particular sector.
- The Employment Rights Bill includes provisions which will allow collective agreements between trade unions and employers to opt-out of the zero hours contracts measures.
In some industries it’s not practical to offer lots of notice. How will these measures work for different sectors and industries?
- The Government is carefully considering the specifics of what ‘reasonable’ should look like, to ensure this measure works for both workers and businesses. Depending on the specific circumstances, it is possible that even very short notice could count as ‘reasonable’.
- The Government will consult on these measures to inform the details of their implementation.
