On 2 June 2026, the government published its consultation on reforms to zero hours contracts: Make Work Pay: ending one-sided flexibility – reforms of zero hours and similar contracts. 

The reforms which are contained in the Employment Rights Act 2025 (ERA 2025) have not yet taken effect. Regulations are required to outline key details of the rights, and this consultation focuses on those regulatory parameters.

Government objectives

The government identifies reliance on zero hours contracts as “one-sided flexibility”: a worker on a zero hours contract can be working 40 hours a week for the same employer for years without any contractual guarantee of future hours. In addition, its proposals seek to rectify the issues regarding shifts: Workers may receive notice of shifts only on the day itself or arrive for work and no shift be available.

Importantly, the government is not proposing a ban on zero hours contracts. It acknowledges that some workers, such as students and those with caring responsibilities, need and value the flexibility they provide. The aim of the proposals is to:

  • Ensure all jobs provide a level of security and stability;
  • Rebalance labour market flexibility; and
  • Support sustained economic growth.

Key Proposals

The consultation is structured around three substantive parts, each addressing a distinct new right:  Right to guaranteed hours; requirements relating to shift patterns (both the right to reasonable notice of shifts and payments for shifts cancelled, moved or curtailed at short notice); and agency workers.

Right to Guaranteed Hours

The ERA 2025 creates a new obligation for employers where they will be required to make a “guaranteed hours offer” to qualifying workers. The offer must reflect the number of hours actually worked by the worker during a reference period. Workers will be able to decline the offer and remain on their existing contract if they prefer.

The key parameters on which the government is consulting are:

  • Hours threshold. Workers will be in scope if they are on a zero hours contract, or if they are guaranteed fewer hours than a threshold to be specified in regulations. The consultation presents options ranging from 8 to 48 hours per week, but the government’s preference is to set this within the range of 8 to 20 hours per week.
  • Initial reference period. The government’s preferred option is 12 weeks.  Alternatives of 26 and 52 weeks are also presented. The reference period will begin when the measures come into effect (for existing workers) or on the first day of employment (for new starters).
  • Subsequent reference periods. After the initial reference period, further reference periods will apply. These may be longer than the initial period. The government is consulting on whether subsequent reference periods should begin immediately after the previous one ends or whether there should be a gap.
  • Regularity requirements. To qualify, a worker’s hours must satisfy regularity conditions. Two options are proposed: Option A: a weekly distribution requirement (i.e. the worker must have worked in a specified minimum number of calendar weeks during the reference period); Option B: a weekly distribution requirement AND a total hours threshold (i.e. a minimum number of hours in excess of contracted hours).
  • Seasonal work and temporary need. Employers will be able to use limited-term contracts where there is a genuine “temporary need.” The consultation seeks views on whether the existing statutory definition (covering specific tasks or particular events) sufficiently covers seasonal fluctuations.
  • Calculation method. The government is consulting on whether guaranteed hours offers should be calculated using a mean average or a median average. It is also considering whether employers should have an “adjustment margin” to account for minor calculation errors or to align offers with shift patterns.
  • Exemptions and exclusions. The government may exclude certain types of workers (e.g. those with multiple contracts with the same employer exceeding the threshold) and may exempt employers from the duty in exceptional circumstances in respect of a reference period.

Right to Reasonable Notice of Shifts

Employers will be required to provide eligible workers with reasonable notice of shifts and changes to shifts. What constitutes “reasonable” will depend on the circumstances of each case, but regulations will set a presumption of what is reasonable as a starting point. The consultation seeks views on whether 1, 2, 3 or 4 weeks should be presumed reasonable for directly engaged workers.

Right to Payment for Shifts Cancelled, Moved or Curtailed at Short Notice

Employers will be required to make a payment to eligible workers when they cancel, curtail or move a shift at short notice. The aim is to incentivise effective workforce planning and ensure workers do not bear all the financial risk of unforeseen circumstances.

Key variables on which the government is consulting include:

  • Definition of “short notice.” The Act does not allow short notice to be defined as more than 7 days. Options range from 1 to 7 days. The government is also considering a separate “very short notice” period (with a higher payment) for cancellations at even shorter notice.
  • Payment amount. Two options are presented: A percentage of what the worker would have earned from working the shift (ranging from 10% to 80%), or a percentage calculated at the National Living/Minimum Wage rate.
  • Exceptions. Views are sought on whether exceptions should apply in certain circumstances, such as extreme weather events or widespread power outages.
  • Enforcement by the Fair Work Agency. The government proposes that the Fair Work Agency (FWA) could enforce the right to short notice payments using its Notice of Underpayment civil penalty regime.
  • Worker-initiated cancellations. No payment is due where the cancellation, movement or curtailment is initiated by the worker, including where workers voluntarily swap shifts or where a worker does not show up for work.

Agency Workers and the Conduct Regulations

The measures extend to agency workers. Hirers will have the obligation to make guaranteed hours offers to qualifying agency workers. Where an agency worker accepts such an offer, they will take up a worker’s contract directly with the hirer. 

For short notice payments, agencies (not hirers) will be responsible for making payments to agency workers, though they will be able to recoup costs from hirers. Throughout the consultation the government seeks to consult what terms should apply to the agency workers.

The government is also consulting on whether to amend the Conduct of Employment Agencies and Employment Businesses Regulations 2003 to require agencies to share relevant information with hirers (e.g. whether an agency worker is in scope of the zero hours measures, and their contact details).

Areas of Uncertainty and Issues to Monitor

The hours threshold remains undecided.  As set out above, the government’s preference is 8 to 20 hours per week, but options go up to 48. The final threshold will determine how many workers fall within scope and will have significant implications for employers with large numbers of part-time staff.

Reference period and the subsequent reference periods.  The proposal in the consultation that any subsequent reference period could be longer than the initial 12-week period is lessening the administrative burden for employers.  The government is also suggesting that there may be a delay between each subsequent reference period.

Mean vs. median calculation. The choice between mean and median averages for calculating guaranteed hours offers will produce materially different outcomes for workers with variable patterns.

Regularity requirements. The precise definition of “regularity” remains open. The choice between Option A (distribution only) and Option B (distribution plus total hours) will significantly affect which workers qualify.

Seasonal work and “temporary need.” The consultation acknowledges that the existing statutory definition may not cover all seasonal fluctuations. Employers in seasonal industries should monitor the outcome carefully.

Collective agreement opt-outs. The conditions under which collective agreements can modify or opt out of these rights are not fully detailed in this consultation.

Settlement agreements:  The consultation document does not address settlement agreements or confidentiality clauses.

Regulations may make different provision for different purposes. The Act expressly permits the regulations to differentiate. This means there may be sector-specific or circumstance-specific variations that are not yet apparent.

Practical Implications for Employers and HR Teams

There is no set date for the implementation of these provisions, it being some point in 2027.  However, there are steps that employers could be taking now to prepare for any changes.

Which workers will fall within scope. While there is still some discussion on which workers on low hours contracts will be covered by these provisions, employers should be auditing their current workforce arrangements to identify which workers are likely to fall within scope, based on the range of potential hours thresholds under consideration.

Workforce planning and record-keeping. When the provisions come into force employers will need to track the hours worked by in-scope workers throughout each reference period in order to calculate guaranteed hours offers. This will require systems capable of monitoring weekly hours distribution, total hours, and shift patterns on an ongoing basis.  Employers should therefore assess scheduling and record-keeping systems to determine whether they are capable of tracking hours worked in the manner required by the proposed reference period and regularity framework.

Shift scheduling processes. Employers will need to ensure their scheduling practices provide reasonable notice. Failure to do so will expose the business to tribunal claims for compensation.

Agency worker arrangements. Hirers of agency workers should be aware that if an agency worker qualifies for and accepts a guaranteed hours offer, that worker will move onto a direct contract with the hirer. This has significant implications for workforce composition, employment costs and contractual arrangements with agencies.

The consultation runs until 25 August 2026.   We will keep you informed of developments in this area.