Each Christmas, UK retailers hire over 400,000 temporary staff to meet festive demand. This year, the rush for mince pies and fairy lights comes with added complexity: the Employment Rights Bill (ERB) could reshape seasonal hiring.

Published 15 December 2025

The festive hiring landscape

The Christmas season is a time of sparkle, celebration and a surge in consumer demand. To cope, retail, hospitality and warehousing businesses rely heavily on seasonal staff. Recruitment often starts in October, with fixed-term or zero-hour contracts offering flexibility. But the ERB, currently progressing through Parliament and the House of Lords, introduces reforms that will change how employers engage these workers.

Current practice

Zero-hour and short-term contracts give employers agility to respond to fluctuating demand. Key features of zero-hour contracts include the freedom to work elsewhere without providing exclusivity to one employer. Employers are not required to offer work, workers are not obliged to accept it and neither party must give notice. A perfect set up for those fitting shifts around Christmas shopping and festive plans?

While these contracts suit some demographics like students, gig economy workers and those seeking extra income during the festive period, they present challenges. Zero-hour staff are generally classified as “workers” rather than “employees”, which means fewer statutory rights (e.g. no unfair dismissal protection and limited redundancy rights). Their income is unpredictable and, if the arrangement is extended, there is limited job security. Industry bodies have long recognised these issues, but during peak seasons, zero-hour arrangements can remain practical for both sides.

What the ERB proposes

The ERB does not ban zero-hour contracts. Instead, it aims to curb “one-sided flexibility” by permitting zero-hour arrangements only with agreement from the worker. Other proposals include:

Guaranteed hours offers:

• if a worker regularly exceeds contracted hours over a reference period, employers must offer a guaranteed-hours contract reflecting those hours
• the reference period is expected to be 12 weeks, starting from the first day of assignment and continuing in 12 week blocks thereafter
• workers will then have a set period within which to accept the offer. Workers can decline and remain on zero-hour terms, but offers must specify days/times when work will be available

Shift notice and compensation

• workers gain the right to reasonable notice of shifts. “Reasonable notice” must include the shift’s duration and start/end times
• notice given less than a “specified amount of time” (to be set by regulations) will be unreasonable. This includes a deviation from a shift pattern included in a worker’s contract
• if a shift is cancelled, moved or cut short at short notice, the employer will need to pay a “specified amount” to the worker. The extent of the financial ramifications is still unknown

Could agency workers solve the problem?

A thrifty employer might seek to pivot around the proposals by engaging agency workers instead. However, agencies cannot deliver a Christmas miracle in these circumstances as the provisions will also apply to agency staff. Hirers will generally be responsible for guaranteed hours offers, so strengthening your agency relationships and having meaningful contractual negotiations is key. For more information on ERB agency proposals, read our article here.

Impact on seasonal hiring

The new zero-hour contract restrictions will create substantial operational challenges for consumer and retail employers during the festive period, where staffing needs fluctuate even hourly. The requirement to provide guaranteed hours for seasonal workers removes the ability to scale labour in line with real-time demand. Practically, this means retailers may be caught paying for unrequired hours on quieter days, increasing wage costs and reducing the responsiveness that peak trading traditionally relies on.

Forecasting demand in advance also becomes significantly harder. Retailers are being asked to effectively “crystal-ball gaze” when deciding staffing levels weeks ahead. Retailers might need to consider methods of predicting consumers’ response to sales, promotions and economic pressures. Realistically, consumer behaviour is difficult to track: a slow Black Friday can be followed by a surge in December, or vice versa. The new provisions force staffing decisions before reliable sales data is available, increasing the risk of overstaffing/understaffing stores and warehouses.

Administrative burdens will also rise. Employers will need earlier recruitment cycles, more complex scheduling systems and tighter contract management. Any error increases exposure to tribunal claims or financial penalties during an already high-turnover period.

The House of Lords has acknowledged these concerns and advocated for regulations that reflect the unique nature of seasonal work. As a compromise, the government has agreed to consult on the impact this new statutory duty will have on seasonal workers and the impact of the new statutory duty on agency workers who do seasonal work before implementing regulations are finalised. Nevertheless, businesses should prepare for significant changes ahead.

Is overtime the answer?

Relying on current employees seeking overtime is no simple fix. Permanent staff may resist additional hours, overtime rates increase costs and workforce fatigue risks rise, particularly in logistics roles where accuracy matters. Overall, retailers will need to invest in earlier planning, stronger agency relationships and more sophisticated demand-forecasting tools to maintain operational stability under the new regime.

Practical steps for employers

The ERB is expected to become law before the end of 2025 with most changes phased in during 2026-2027. Once these provisions come into force, employers should:

Audit your workforce: Identify zero-hour and low-hours contracts and review workload planning systems.

Adapt recruitment strategies: Explore hybrid models which combine permanent staff overtime with limited seasonal hires.

Plan ahead: Forecast peak retail trading staffing requirements early and manage rotas proactively to minimise the risk of overstaffing.

Monitor hours: Implement software or clocking-in systems to track average hours worked for compliance.

Fixed-term contracts: There will be limited circumstances that will allow an employer to offer a fixed-term contract where it is “reasonable” e.g. the worker is only needed to perform a specific task. This provides a potential route to manage short-term demand although employers should anticipate claims and developing case law to determine what is “reasonable”.

Key takeaway

The ERB seeks to balance flexibility with fairness. Seasonal hiring will remain possible, but it will require more planning and robust compliance processes. Employers should start risk-assessing the Bill’s impact now, exploring hybrid staffing models and ensuring systems can manage guaranteed-hours obligations.