The government has published further details of its proposed reforms to zero hours contracts as part of the wider Employment Rights Act implementation programme.
The proposals effectively seek to limit arrangements where workers regularly work predictable hours but remain engaged under contracts that provide little or no certainty over working time.
Guaranteed Hours Offers
Under the current proposals, employers would be required to offer qualifying workers a contract that reflects the hours they regularly work in practice. A 12 week reference period is currently being consulted on to determine whether a worker has established a sufficiently regular working pattern.
Workers would generally be able to decide whether to accept or decline any guaranteed hours offer.
Although the proposals are widely described as a ban on zero hours contracts, the reforms are likely to affect a broader range of working arrangements. Employers that use low-hours contracts or other flexible working arrangements may also be affected where workers regularly work substantially more hours than their contractual minimum.
As a result, organisations that do not currently engage workers under zero hours contracts should not assume that the proposals are irrelevant to their workforce. The focus is expected to be on actual working patterns rather than contractual labels alone.
Compensation for Cancelled Shifts
The government is also consulting on new rights for workers whose shifts are cancelled, moved or significantly reduced at short notice.
The level of compensation and the notice period that would trigger payment obligations have not yet been finalised. If implemented, the measures could require employers to review workforce scheduling practices, particularly in sectors that rely heavily on flexible staffing arrangements.
One of the most significant unresolved aspects of the consultation concerns agency workers. The government is considering whether responsibility for guaranteed hours offers should sit with the employment agency, the end hirer or both.
Any extension of the new rights to agency workers could have significant implications for sectors that rely heavily on contingent labour, including logistics, warehousing, manufacturing, hospitality and social care. Employers that use agency labour extensively should monitor developments closely as the consultation progresses.
Impact on Employers
For many organisations, the practical challenge is likely to extend beyond contractual documentation. Workforce planning, rota management, payroll records and attendance data may become increasingly important in demonstrating compliance with the new regime.
Employers that regularly provide workers with consistent weekly hours may face increased obligations to offer contracts that more closely reflect actual working patterns.
Employers may also face increased employment tribunal exposure where workers argue that guaranteed hours should have been offered but were not. Workforce records, rota data, payroll information and attendance records may become increasingly important in demonstrating compliance and defending potential claims.
The proposals are expected to have the greatest impact on employers in sectors such as hospitality, retail, leisure, logistics, warehousing and care services, where zero hours and low hours contracts are commonly used.
Consultation Continues
Several aspects of the proposals remain under consultation, including the reference period for calculating regular hours, compensation arrangements for cancelled shifts, the position of agency workers and potential exemptions for seasonal industries.
The government has indicated that further regulations and guidance will follow before the new rights take effect.
What Employers Should Do Now
The consultation forms part of a wider programme of employment law reform that is increasing employment costs and reducing workforce flexibility across a number of areas. Alongside changes affecting Statutory Sick Pay, collective redundancy consultation and wider worker protections, employers are facing growing pressure to reassess workforce planning models.
Organisations that rely on large casual workforces may wish to identify workers who regularly work predictable hours, review shift allocation practices and assess the potential financial impact of guaranteed hours obligations before the reforms are finalised.
While the final details remain subject to consultation, employers may wish to begin preparing for the proposed changes by:
- Identifying workers who consistently work regular hours despite being engaged on flexible contracts.
- Reviewing the use of zero hours and low-hours arrangements across the organisation.
- Assessing reliance on agency workers and contingent labour.
- Reviewing policies and practices relating to shift allocation and cancellation.
- Monitoring future government announcements and draft regulations.
Early assessment of workforce arrangements may help employers understand where the proposed reforms could create additional operational, financial and compliance obligations.
Details of the consultation can be found here >
Author
Gill Laing is a qualified Legal Researcher & Analyst with niche specialisms in Law, Tax, Human Resources, Immigration & Employment Law.
Gill is a Multiple Business Owner and the Managing Director of Prof Services - a Marketing Agency for the Professional Services Sector.
