Will employers be able to use zero and low hours workers going forwards?

On 1 July 2025, the government published its roadmap for the implementation of the Employment Rights Bill (the Bill). It has now been confirmed that the proposed reforms affecting zero and low hours workers will take effect in 2027.

The measures set to be implemented by the Bill represent the Labour government’s commitment to ending the exploitative use of zero-hour contracts and promoting predictable working patterns.

Although these changes may seem a long way off, employers now have a clear window of time to prepare for the changes and those who rely heavily on zero and low hours workers should begin to assess how these reforms will impact their workforce and consider whether such contracts will remain viable in the long term.

What we know

The Bill proposes the following measures relating to zero and low hour workers:

• right for “qualifying workers” to be offered guaranteed hours by their employers after a set reference period (likely to be 12 weeks)
• “qualifying workers” will include zero-hour workers and “low hours” workers and workers may reject an offer of guaranteed hours
• there will likely be exceptions to this right, for example if an employer can justify a genuine temporary need for the zero or low hour contract
• workers will be able to bring employment tribunal claims if they've missed out on a guaranteed hours contract or been given one for fewer hours than expected to avoid employers limiting workers’ hours in an effort to get around the guaranteed hours regime
• employers may be able to contract out of the duty to offer guaranteed hours through collective agreement with recognised trade unions
• right to reasonable notice of shifts, changes and cancellations
• right to compensation for cancelled, moved or curtailed shifts

What we don’t know

Despite the above, the government are yet to clarify the following:

• the definition of “low hours” and how the reference period will be calculated
• the required format of guaranteed hours offers and their enforceability
• the detail and scope of any exceptions
• the “permitted maximum” that could be claimed by workers at Tribunal where employers have attempted to avoid the new guaranteed hours measures
• the amount of notice required and compensation to be paid for changes to shifts

Recent proposed amends to the Bill 

On 8 July 2025, Parliament published further proposed amendments to the Bill. If adopted, the amendments would significantly soften the current provisions in the Bill relating to zero and low hour contracts. Key changes include:

• replacing the employer’s duty to offer guaranteed hours with a worker’s right to request them
• limiting this right to those averaging 8+ hours per week over 26 weeks, effectively excluding ultra-low-hour workers from the protections
• requiring employers to pay compensation only where shifts are cancelled with less than 48 hours’ notice

The House of Lords Report Stage began on 14 July 2025, and the proposed amends are already being reviewed and debated; some of the amendments above have already been agreed and made to the Bill. However, following the House of Lords Report Stage, the Bill will return to the House of Commons for its third reading and as the amendments relating to zero and low hour workers lack government backing, they are unlikely to pass and form part of the final version of the Bill.

At the third reading, the final version of the Bill will be debated and approved before it is given royal assent. The government will also need to pass substantive regulations alongside the Bill.

Risk areas for employers

With key details of the changes still to be clarified, it is difficult to assess the full impact that they will have however we do know that they will have a greater impact on businesses and industries who rely on flexible staffing models and project-based staffing – this includes retail, hospitality, charities, care providers, as well as logistics, distribution and supply chain sectors among many others!

The main risk areas for employers are:

• increased labour costs – employers may face increased staffing costs due to the obligation to offer guaranteed hours after a short reference period, and this could lead to overstaffing for employers with fluctuating demand
• operational complexity – employers will need to implement robust systems to track workers’ hours and shift patterns to ensure that offers of guaranteed hours are issued correctly
• employment Tribunal claims – employers will be at risk of new types of claims resulting from non-compliance with the incoming rules
• shift to employee status – issuing new contracts with mutual obligations also poses the risk of some workers being reclassified as employees which would trigger additional rights and protections for the employee and further obligations for an employer

Will employers be able to use zero and low hours workers going forwards?

Employers will still be able to use zero and low hour workers but with significant restrictions. After a short reference period, they will likely be required to offer guaranteed hours unless a genuine temporary need can be justified. This, along with new requirements to provide reasonable notice of shifts and compensate workers for cancellations and changes will significantly increase costs and administrative burdens.

This means that while zero and low hour contracts won’t be banned altogether, their viability will depend on the nature of the work and the employer’s ability to comply with the new obligations. Businesses that rely on flexibility will need to reassess their staffing models and may need to move towards more stable and predictable contracts. Employers should begin preparing now to ensure compliance and minimise disruption when the changes are confirmed and come into force.