Zero-Hours Contracts Explained

A zero-hour contract can be defined as an employment arrangement under which an employee has no guaranteed hours of work and may be required to be available for work but is not assured payment for any minimum hours of work.

Protection against zero-hour contracts

In October 2024, the Employment Rights Bill, included the right for workers to be offered guaranteed-hours contracts if they work regular hours in order to protect workers on zero-hour contracts.

The government estimates that there are around 1.13 million people in employment, which is around 3% of employed people in the UK, who are on zero-hours contracts. The government pledged to ban exploitative zero-hours contracts and end one-sided flexibility. It must be stated that the Act does not outrightly ban zero and low hours contacts however it provides new rights for workers under these contracts.

The Act introduces a new duty for employers to offer “qualifying workers” a guaranteed hours contract which “reflects” the hours they work over a “reference period”.  The Act ensures that all jobs provide a baseline level of security and predictability.  However, the government has taken into account the fact that some people with caring responsibilities or students benefit from this which is why the changes made will not take away the flexibility for workers who benefit from this way of working.

Reasonable Notice

The Act gives workers not only the right to guaranteed hours, but also the right to reasonable notice of their shifts. The government has proposed that the rights to reasonable notice and to payments for shifts that are cancelled, curtailed or moved at short notice should apply only to workers below an ‘hours threshold’ to be set out in the regulations. At this moment in time, ‘reasonable notice’ is the subject of further consultation and the government has indicated that it will set out factors that tribunals should lok to when determining whether or not the notice in question was reasonable

Compensation

The Act states that workers now have the right to receive compensation if their shifts are cancelled, moved or curtailed at short notice to increase the security of these contracts and to ensure that there is no exploitation of employees by their employers. This reform, like the others, is expected to take effect in 2027 and further details are set to be clarified in regulations following a consultation.

Effect on Employers

The zero and low hour reforms are very significant changes the complexity of the changes adds a sense of unpredictability to the precision of predictions that employers can make in regard to its effect. Additionally, most of the detail of how the reforms will operate in practice has been left up to regulations, making it difficult for organisations to gauge how big an impact this will have. It was hoped that the consultation would provide further insight, however, at this current moment in time, it is apparent that there is still a lot left to be decided and it seems likely that further consultations will be required. This provides employers with an opportunity to influence how the new framework will work in practice.

It also calls into question whether the current implementation date of 2027 is realistic, given the government has committed to giving employers plenty of time to prepare for the changes, including publishing guidance to support employers.

If you require expert legal advice or support with any aspect of your matter, our experienced team of solicitors at Aston Bond are here to help. We are committed to providing clear, practical and tailored legal solutions to help you move forward with confidence. Contact our team today on 01753 486 777 or email info@astonbond.co.uk to discuss how we can assist you.