Government consults on new zero hour contract rights for workers

The Government has launched a consultation on how new zero- and low-hours protections, including zero hour contract rights, under the Employment Rights Act 2025 (the “ERA 2025”) should work in practice. The consultation forms part of the wider “Make Work Pay” agenda and focuses on three new rights: a right to guaranteed hours for qualifying workers, a right to reasonable notice of shifts, and a right to compensation where shifts are cancelled, moved or curtailed at short notice. The consultation opened on 2 June 2026 and closes on 25 August 2026, with the detail to be set out in regulations rather than on the face of the Act. Employers who rely on flexible staffing arrangements should now be reviewing how these proposals could affect their workforce planning, rostering and payroll processes, particularly in relation to zero hour contract rights.

Full details of the consultation are available on the UK Government website, and further guidance can be found via ACAS.

Right to guaranteed hours and zero hour contract rights

Eligibility and scope

Under the ERA 2025, qualifying workers will be entitled to receive an offer of guaranteed hours where their working pattern shows sufficient regularity over a defined reference period, strengthening zero hour contract rights in practice. The consultation makes clear that this right will apply not only to workers on zero-hours contracts, but also to those whose contractual hours fall below a specified threshold. This threshold has not yet been fixed. Options range from 8 hours to 48 hours per week, although the Government have indicated their preferred range is between 8 and 20 hours per week.

Reference periods

The number of guaranteed hours to be offered would be based on hours worked during a reference period. The Government currently prefers an initial 12-week reference period, but is also consulting on longer alternatives of 26 or 52 weeks. It is also seeking views on how later reference periods should operate, including whether they should run immediately after the previous period or whether gaps should be permitted.

Defining regular working patterns

Another key question is what it means for a worker to have worked with sufficient regularity. The consultation outlines two possible approaches. The first is a weekly distribution requirement, under which the worker must have worked in a minimum number of weeks during the reference period. The second combines that weekly distribution test with a further requirement to have worked a minimum number of hours above the worker’s contractual hours. The Government is also consulting on whether guaranteed hours should be calculated using a mean or median average, whether employers should retain flexibility over how hours are allocated across a week or month, and whether a small adjustment margin should be permitted to reflect minor calculation differences or established shift patterns.

Exceptions and exclusions

The consultation also addresses cases where no guaranteed hours offer would be required. In particular, workers engaged on a limited-term contract shorter than the relevant reference period may fall outside the regime, provided the limited term is reasonable. The ERA 2025 indicates that a limited term will be reasonable where the worker is needed for a specific task, until a particular event occurs, or for another temporary need to be defined in regulations. The Government is also considering whether particular categories of worker should be excluded altogether, and whether employers should be exempt in exceptional circumstances such as business interruption caused by events like flooding.

Reasonable notice of shifts under zero hour contract rights

Proposed notice periods

The consultation also seeks views on what amount of notice should be presumed reasonable when offering or changing shifts, which is a key aspect of zero hour contract rights. For directly engaged workers, the options range from one week to four weeks, with an option for respondents to propose an alternative. For agency workers, the Government is also consulting on whether a shorter period of five days or less may be appropriate in some cases.

When longer or shorter notice may apply

The consultation recognises that a single notice period may not work for every arrangement. It therefore asks when longer notice should be expected, for example where a worker is contractually required to accept shifts offered, and when shorter notice should be treated as acceptable, such as where an employer is seeking urgent last-minute cover. These questions are likely to be particularly significant for sectors that depend on variable staffing demand, including hospitality, retail, care and logistics.

Payment for short-notice cancellation, movement or curtailment of shifts

Short-notice thresholds

The ERA 2025 provides that workers should receive compensation if a shift is cancelled, moved or curtailed at short notice, reflecting evolving zero hour contract rights, but leaves the detailed rules to regulations. The consultation confirms that the short-notice period cannot exceed 7 days and asks what the appropriate period should be. It also asks whether there should be a separate category of very short notice attracting a higher level of payment.

Compensation levels

On the level of compensation, the Government is considering whether payments should be calculated as a percentage of expected earnings or by reference to the National Living Wage or National Minimum Wage. The options under consultation range from 10% to 80% for short-notice changes, and from 30% to 80% where very short notice applies. The consultation also asks whether employers should have limited defences where a cancellation or change is driven by external factors such as extreme weather or power outages, in which case an explanation notice may be required.

Enforcement

Enforcement is also under consideration. Workers will be able to bring claims in the employment tribunal, but the Government is consulting on whether the Fair Work Agency should also be able to enforce short-notice payments. Its proposal is that the Agency could issue notices of underpayment requiring the employer to pay arrears to the worker and a penalty to the Government. The preferred penalty is 50% of the arrears owed, subject to a minimum of £100 and a maximum of £5,000 per worker.

What should employers do now?

Although the detailed rules are not yet finalised, this consultation gives a strong indication of the direction of travel. Employers that use zero-hours, low-hours or other highly flexible arrangements should start identifying which parts of their workforce may fall within scope, how working hours are recorded in practice, and whether existing systems can support any new obligations around guaranteed hours, shift notice and compensation, particularly in light of evolving zero hour contract rights. This is also a good opportunity to review contracts, rostering practices and contingency arrangements for cancelled shifts.

The consultation remains open until 25 August 2026. While the final regulations may differ from the current proposals, the consultation makes clear that employers should expect materially greater obligations where working arrangements are flexible in name but regular in practice.

For further advice, visit our employment law services page or explore our latest employment law insights.

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