Zero-Hours Contracts and Guaranteed Hours: What Employers Need to Prepare For

Zero-hours and low-hours contracts have long given employers flexibility to scale a workforce up and down with demand, but that flexibility has come at a real cost to workers who cannot predict their income or plan their lives around unpredictable shift patterns. The Employment Rights Act 2025 addresses this directly, introducing a new right to guaranteed hours for workers on zero-hours and low-hours arrangements, alongside new rules on shift notice and cancellation compensation. Unlike some of the Act's other reforms, the detailed mechanics here are still being worked out through consultation, which makes this a moving target employers need to track rather than a fixed rule they can implement once and forget.

This guide sets out what the Act actually provides for, what remains genuinely open, and what employers with zero-hours or low-hours staff should be doing now.

The right to guaranteed hours

Workers on zero-hours contracts, and those on "low-hours" contracts falling below a threshold expected to sit somewhere between 8 and 20 hours a week, will gain the right to be offered guaranteed hours that reflect the hours they have regularly worked over a reference period. This is a positive obligation on the employer — it is not something the worker has to request. Where a worker's actual pattern of work over the reference period shows they have consistently worked, say, 25 hours a week despite being engaged on a zero-hours basis, the employer will need to proactively offer a contract reflecting that reality.

The length of the reference period is one of the details still being consulted on, with a 12-week period floated as the initial proposal. Employers should not assume this figure is final, since the government's own consultation on the implementing regulations only closed on 25 August 2026, and the response has not yet set the period in stone.

Reasonable notice of shifts, and compensation when shifts change

Separately from the guaranteed hours offer, the Act introduces a right to "reasonable notice" of shifts and working times, and a right to compensation where a shift is cancelled, moved, or curtailed by the employer without reasonable notice. This addresses a distinct and very common frustration for zero-hours workers: being scheduled for a shift, arranging childcare or other commitments around it, and then having it cancelled at short notice with no financial consequence for the employer under the current law.

What counts as "reasonable" notice, and how compensation is calculated when it isn't given, are both still subject to the same consultation process referenced above. Employers should expect the final rules to set out specific minimum notice periods and a formula or scale for compensation, rather than leaving "reasonable" undefined in practice.

Agency workers are covered too

A detail employers using agency staff should not overlook: the guaranteed hours right and the shift notice and compensation rights extend to eligible agency workers as well as directly employed zero-hours staff. Under the Act's framework, employment agencies carry responsibility for making guaranteed hours offers to eligible agency workers and for paying compensation on short-notice shift changes, but the end-user client and the agency share responsibility for giving reasonable notice of shifts in the first place. This means a business relying heavily on agency staff to cover variable demand cannot treat this as solely the agency's problem — the contractual and operational arrangements between client and agency will need to reflect the shared nature of the obligation.

When this actually takes effect

Unlike several other Employment Rights Act 2025 reforms that now have confirmed 2026 implementation dates, the zero-hours and guaranteed hours provisions are scheduled for "at some point in 2027," with the precise date dependent on the regulations that follow the August 2026 consultation. Employers should read confident-sounding claims of a specific 2027 date with some caution until the government publishes its consultation response and the underlying regulations — the general shape of the reform is settled, but several operative details are not.

This staged approach mirrors the wider rollout of the Act, which our guide to the Fair Work Agency covers in more detail — the new enforcement body being stood up to police compliance across these reforms, including, in time, the guaranteed hours and shift notice rights.

What employers should do now

• Map your zero-hours and low-hours workforce. Identify which workers, over a realistic reference period, are working consistently more hours than their contract technically guarantees — these are the workers most likely to trigger a guaranteed hours offer once the rules bite.
• Review your shift-scheduling and cancellation practices. A pattern of late cancellations with no compensation is exactly the practice this reform targets; getting ahead of it now reduces the scale of process change needed later.
• Check agency worker arrangements. Confirm with any staffing agencies you use how they intend to handle the shared notice obligation, since the end-user client carries responsibility alongside the agency.
• Watch for the consultation response. The reference period length, the definition of reasonable notice, and the compensation formula are all still to be confirmed — build a review point into your compliance calendar for when the government responds.

Frequently asked questions

Do zero-hours contracts become illegal under the Employment Rights Act 2025?

No — zero-hours and low-hours contracts remain lawful. The reform gives workers on these contracts a right to be offered guaranteed hours reflecting their actual working pattern; it does not ban the underlying contract type.

When do these rights take effect?

The provisions are expected to take effect at some point in 2027, following a government consultation on the implementing regulations that closed on 25 August 2026. An exact date has not yet been confirmed.

Does this apply to agency workers?

Yes — eligible agency workers gain the same guaranteed hours and shift notice and compensation rights, with responsibility shared between the employment agency and the end-user client.

The zero-hours and guaranteed hours reforms are still taking shape through consultation, but the direction of travel is clear enough that employers with a significant zero-hours or low-hours workforce should start reviewing their scheduling and contract practices now rather than waiting for the final regulations. Learnsignal's CPD courses cover the Employment Rights Act 2025 reforms as they are confirmed through 2026 and 2027.