Ending one sided flexibility – key points from the Government’s Consultation on new rules relating to zero and low hours contracts

By Nicola Smyrl

Partner

07 July 2026

Article Blog

The Government has recently published its long-awaited consultation on reforms to zero hours and low hours working arrangements, provided for under the Employment Rights Act 2025 (ERA).

As part of its manifesto commitment to end “one sided flexibility” the ERA introduces three new principal rights:

• A right to guaranteed hours;
• A right to reasonable notice of shifts; and
• A right to compensation where shifts are cancelled, shortened or changed at short notice.

These rights have not yet taken effect and regulations are required to outline key details, which this new consultation focuses on. Following consultation, the government will develop final policy positions before they lay regulations in Parliament which make these policy positions law.

The new rules will apply to workers who are engaged directly by the employer, as well as agency workers, with obligations in respect of agency workers affecting both the agency and the hirer, depending on the obligation in question.

For employers, preparing for these new rights is challenging, because so many of the key details are missing from the legislation.  This consultation addresses several of these outstanding issues although as the Government expresses no preference in many areas, it remains difficult to predict what the final set of rules will look like, and the level of impact the new rules may have.

The consultation is open until 25 August 2026.  The consultation document is complex and detailed, running to 83 pages.  We have summarised below the issues which are likely to be most relevant for employers with casual workforces. 

The consultation can be viewed at this link: https://www.gov.uk/government/consultations/make-work-pay-ending-one-sided-flexibility-reforms-of-zero-hours-and-similar-contracts

Guaranteed Hours Contracts

The Employment Rights Act 2025 creates a new obligation for employers to offer guaranteed hours to qualifying workers. The right to guaranteed hours is intended for workers who regularly work for an employer but whose contractual arrangement does not reflect the hours they regularly work.

Issues to be considered as part of the consultation include:

Hours threshold

The consultation considers the maximum number of hours a worker can be entitled to under their contract and still be protected under the new rules.  The options set out in the consultation document are between 8 and 48 hours per week.  The Government preference is within the range of 8 to 20 hours per week on the basis that options within this range are more likely to provide a favourable balance of costs and benefits.

This aspect of the consultation is key to understanding the potential impact these new rules will have on employers who rely on casual workforces, with a lower threshold capturing fewer workers.

Reference Periods – initial and subsequent

Guaranteed hours offers must be calculated by employers based on the hours worked by a qualifying worker during the initial reference period and thereafter, during subsequent reference periods.  Options being considered are 12, 26 and 52 week periods with the Government expressing a preference for a 12 week initial reference period.  The government acknowledges that shorter reference periods will be a greater administrative burden than longer periods.

Regularity requirements

For a worker to qualify for a guaranteed hours offer, the hours that they worked during the reference period must satisfy conditions set out in regulations around regularity.  The intention is that only workers who work regularly for their employer will be entitled to this new right.

The consultation seeks views on two options for defining the regularity requirements for the hours worked during the reference period: Weekly distribution only. The worker worked in a specified minimum number of calendar weeks (for example between 6 and 12 out of a 12-week period and need not be consecutive); and: Weekly distribution and total hours. The worker must meet the weekly distribution requirement and exceed their contracted hours by a specified minimum total.  Whilst the first option may be easier for employers to manage, it is likely to capture more workers.

Calculations

The guaranteed hours offer will need to reflect the number of hours a qualifying worker worked during a reference period. The government is considering two options for how the guaranteed hours offer should be calculated, mean or median average over a reference period.

The Government has noted that in some cases, a median average could be more representative of the hours a worker regularly works. In a median calculation, weeks where the worker works an unusually high number of hours will have less influence on the guaranteed hours offer.

Time periods

How the guaranteed hours in the offer are managed is also being considered, for example, over a week or a month.  The Government has not expressed a preference, but a longer time period may enable the employer to have greater flexibility around working arrangements.

Seasonal Work and temporary needs

Limited terms contracts which may avoid staff being caught by the new rules, will be permissible, but only where it is reasonable to use that type of contract in respect of specific tasks or particular events.  The consultation asks whether a third category of “temporary need” should be defined in regulations to cover other scenarios.  How broadly the definition of “temporary need” is drawn will be important in terms of understanding how employers can address genuine changes in demand throughout the year.

A Right to Reasonable Notice of Shifts

The ERA provides workers with the right to reasonable notice of shifts and shift cancellations and changes. The consultation seeks views on how this should apply, taking into account the aim of the new rules is to provide a baseline of income security for people who do not have it.  

Therefore, the government proposes that the rights to reasonable notice of shifts should only apply to people with up to and including a certain number of hours guaranteed in their contract. Suggested options range from 8 to 48 hours, with the Government expressing no preference.  Employers will note that the higher the threshold is set, the more workers that will be covered by the right.

The consultation also suggests that regulations will set a period of notice that is ‘presumed reasonable’. Where a case goes to tribunal, if an employer has given less notice than the amount presumed reasonable, the employer will need to establish that it was reasonable in the circumstances. If the employer has given more notice than the amount presumed reasonable, the worker will need to establish that it was not reasonable in the circumstances.

The consultation proposes options ranging from one to four weeks, noting that current analysis suggests that a significant percentage of workers are given less than one week’s notice of shifts and at times less notice for changes.

A Right to Compensation for Shifts Cancelled, Curtailed or Moved at Short Notice

Issues considered in the consultation include what will count as short notice (with options ranging from 1 day to 7 days) and how much should a worker be paid for a shift that is cancelled on short notice (with options ranging from 30% to 80% of the shift pay).

The consultation also seeks views on how the rights in relation to compensation should be enforced and whether penalties should be applied for employers who do not comply.  It is possible that the enforcement regime will be similar to that currently in place for National Minimum Wage.

Action Points for Employers

As it is not yet clear when the various new rights will come into force, there is no need for employers to take any immediate action.  However, employers that rely on a casual workforce should consider how they may be impacted, and potential preparatory steps may include:

• Auditing the current workforce to identify what workers are engaged on zero-hour or low hour contracts and why.
• Conducting an exercise to assess how various thresholds in terms of references period and other calculations might impact the business.
• Looking at seasonal fluctuations and the extent to which these could potentially be managed by limited or fixed term contracts.
• Considering how shifts and working arrangements are currently managed and how different notice requirement could affect the business.
• Review use of agency workers.

If you have any queries about the matters referred to in this article, or any other employment law matters, you can contact Taylor Walton’s Employment Law team here.

Disclaimer: General Information Provided Only

Please note that the contents of this article are intended solely for general information purposes and should not be considered as legal advice. We cannot be held responsible for any loss resulting from actions or inactions taken based on this article.