Zero hours redefined: Preparing for a new era of structured flexibility
The Employment Rights Bill challenges how employers engage casual staff - but also offers choices. Here’s how to prepare.
For many years, employers have relied on the informal flexibility of zero hours and low-hours arrangements to meet fluctuating demand. Verbal agreements, last-minute changes, and rotas shared by group chat have been common practice in many sectors. That flexibility has served a purpose, but under the Employment Rights Bill, it is about to be replaced with something far more formal.
The changes introduce a new statutory framework that will apply to zero hours and other atypical workers. For the first time, casual arrangements will be governed by a legal regime setting minimum standards around hours, notice and compensation. For employers, especially those with large, shifting workforces, the implications are significant. But the Bill does not simply tighten the rules: it also opens a door. A mechanism to contract out through collective agreements with unions could give employers more control over how they meet their obligations.
Here's what is changing, where the key risks lie, and how you can prepare for this fundamental shift in the regulation of non-standard work.
A new legal baseline for casual work
The Bill introduces three core entitlements for qualifying workers:
- a duty to offer guaranteed hours once certain thresholds are met
- a right to reasonable notice of shifts
- a right to compensation where shifts are cancelled, changed or curtailed at short notice.
These protections aim to offer greater predictability for workers who currently have little control over their hours. But they also signal a shift in expectations for employers.
The new rights won't just apply to zero hours contracts. They will also cover contracts that guarantee only a small number of hours or involve irregular and unpredictable scheduling in practice. However, the precise thresholds - how many hours, how often and over what period - is not yet known and will be set in future regulations. Until then, uncertainty remains about which existing working arrangements might fall within scope.
This makes it difficult to assess risk or model workforce needs with confidence. Some roles may qualify unexpectedly where workers regularly exceed their contracted hours, while others may qualify simply due to patterns that happen to emerge over a given period. In the meantime, employers will need to:
- keep flexible arrangements under review
- monitor working patterns more closely
- consider whether certain roles should be restructured or formalised ahead of implementation.
This isn't just a legal shift; it reflects a change in how flexibility is treated. Employers who have long relied on discretion and trust will now need clearer processes, consistent documentation and defensible systems.
Guaranteed hours: more than just a formality
One of the most significant changes is the introduction of the guaranteed hours offer (GHO). Once a worker exceeds a set threshold of hours during a reference period, the employer must offer a contract reflecting their actual hours - either via a new contract or a variation of the existing one.
The government has indicated that the initial reference period will be 12 weeks, although this is still subject to consultation. That period will begin either on the date the new law comes into force or, for workers who join later, on their individual start date. After the initial period, further reference periods will run consecutively, with no ability to align or adjust them across the workforce. Each worker’s timeline will therefore be unique, shaped by the date they started and the hours they’ve worked during each period.
These are not rolling reference periods. Employers will not be able to look back over any convenient 12-week window. Instead, they will be required to measure each worker’s hours over fixed, back-to-back periods, tracking when each one starts and ends. Once the initial period ends, the next begins immediately. This design makes the duty to offer guaranteed hours a recurring obligation, not a one-off assessment.
In practice, this will create a significant administrative burden. Employers will need to:
- maintain detailed, real-time records of hours worked
- monitor when each individual worker reaches the end of a reference period
- issue timely and compliant offers
Where casual or low-hours workers are engaged on different dates, as will almost always be the case in large or dynamic workforces, this means managing hundreds or even thousands of overlapping timelines simultaneously.
The Bill allows for limited-term GHOs, but only where there is a genuine, time-limited need for the work. What counts as “reasonable” in this context is not defined. If employers rely too readily on fixed-term GHOs, they may risk challenge or find themselves unable to justify the approach. There is also a wider risk that issuing GHOs, particularly those requiring mutual obligations and a regular pattern, may shift the worker’s employment status from “worker” to “employee”, triggering further rights and protections.
This is a technically complex provision with far-reaching practical consequences. Employers relying on flexible or casual staffing models will need to design new systems to track hours worked, monitor individual reference periods, and issue timely offers. They will also need to plan for the additional cost and administrative pressure that will inevitably follow, particularly where staffing patterns are large, decentralised or continually changing.
Notice and cancellation: informal systems under strain
The Bill also introduces a right to:
- reasonable notice of shifts
- compensation where shifts are cancelled or cut after being accepted
These rights apply even where the shift would have formed part of a broader pattern, or where the worker is not yet formally under contract. What counts as 'reasonable notice' will be clarified in regulations. If a shift is cancelled or changed with insufficient notice, and the worker was expecting to work, compensation will be due, unless a written exception notice has been properly issued.
Risks will arise where shifts are offered to multiple workers at once. In “multi-worker offers”, where several people are invited to fill the same slot, uncertainty over who was selected could also lead to claims. This is especially risky in environments where shifts are allocated informally including through messaging apps, group emails, or word of mouth. Without a clear paper trail, it may be difficult to rebut claims.
Building robust, defensible systems for offering, accepting, and withdrawing shifts will be essential. That means capturing who was offered which shift, who accepted, who was selected, and how and when decisions were communicated. It also means issuing written notifications when relying on exceptions under the Bill.
Agency workers: added complexity
The same rights will apply to agency workers, but with added complexity. For GHOs, the obligation to make the offer falls on the hirer, not the agency. Responsibility for notice and compensation are shared, depending on who made the relevant decision.
This creates complexity in tripartite relationships. If responsibilities are unclear or poorly coordinated, employers may face disputes, delayed action or shared liability.
Clear contractual arrangements and regular collaboration between hirers and agencies will be vital to avoid confusion and ensure compliance.
A strategic choice: comply or contract out?
Crucially, the bill allows employers to contract out of the new obligations via collective agreement with an independent trade union. Where a recognised union is in place, employers can negotiate alternative terms that replace the statutory obligations, provided those terms are incorporated into individual contracts and clearly communicated.
This may be a significant step, particularly for employers with little history of trade union engagement. For some employers, this will not be a desirable route; but for others, it may offer a more workable and flexible solution than managing multiple reference periods, tracking individual offers, and issuing formal notices for every change.
Employers that already have a recognised union may wish to consider whether renegotiating certain terms could help manage their exposure. Others, especially those in unionised sectors or with high volumes of casual labour, may conclude that voluntary recognition is a pragmatic way to shape how the new rights apply in their business. In either case, the ability to contract out creates a meaningful choice, and a potential competitive advantage.
Preparing for change
Although the full detail of the regime will follow in regulations, the strategic direction is clear. This is not just about compliance - it’s about control, planning and sustainability. Employers should begin reviewing how they use flexible labour and asking key questions: Who is likely to qualify? Are our contracts aligned with reality? Do our shift systems leave an audit trail? Can we justify our current approach?
It is also the right time to segment the workforce, distinguishing between genuinely ad hoc roles and those that, in practice, operate on a regular pattern. The former may fall outside the scope of the new regime. The latter may trigger recurring obligations.
This is not just a compliance exercise; it is a shift in how the law views flexibility. Employers who invest early in structure, clarity and consistency will be better placed to retain control over their workforce and to respond strategically as the framework takes shape.