Zero Hours Contract Reforms: The Consultation Window Is Closing Fast
If you use zero hours or low-hours contracts anywhere in your business, there’s a consultation running right now that will shape how you’re allowed to run them from 2027 — and it closes on 25 August 2026. It’s not law yet, but the direction is clear, and this is your last real chance to have a say in how the detail gets settled.
What’s Being Proposed
The Government isn’t banning zero hours contracts. Its stated aim is to end what it calls “one-sided flexibility” — where a worker can be doing regular, predictable hours for years with no contractual guarantee of any of it continuing. Under the Employment Rights Act 2025, three new rights are heading for qualifying workers (including agency workers):
A right to guaranteed hours. Workers who regularly work more than their contracted hours during a “reference period” must be offered a contract reflecting what they actually work. They can decline and stay on their existing arrangement — but they’ll be offered guaranteed hours again at the next reference period.
A right to reasonable notice of shifts. Covering both new shifts and changes to existing ones, including altered start and end times.
A right to payment when shifts are cancelled, cut short, or moved at short notice.
What’s Still Being Decided
This is exactly what the consultation is asking about, and it’s worth knowing where the Government’s leaning:
- The hours threshold. Who counts as “low hours” enough to qualify. Options range from 8 to 48 hours a week, but the Government’s preferred range is 8 to 20 hours.
- The reference period. How far back to look when calculating what a “guaranteed hours” offer should reflect.
- How notice and cancellation pay are calculated — including whether compensation should be based on actual lost earnings or a minimum wage rate, and whether exceptions should apply for things like extreme weather or a power outage.
- Agency worker arrangements. If an agency worker qualifies for and accepts a guaranteed hours offer, they move onto a direct contract with the hirer — a significant shift for anyone using agency staff to cover fluctuating demand.
Why This Matters for Your Sector
Traditional flexible scheduling — common in retail, hospitality, logistics, care, and manufacturing — is squarely in scope. If your business relies on zero hours or low-guaranteed-hours contracts to manage peaks, seasonal demand, or shift cover, this isn’t a distant policy debate; it’s a direct look at how your rotas and staffing models will need to work in future.
What You Can Do Now
Respond to the consultation if it affects you. It closes 25 August 2026, and this is genuinely one of the few areas of the Employment Rights Act where the detail is still being shaped — employer input can still influence where the thresholds land.
Map your current zero and low hours arrangements. Know which roles and contracts would likely fall inside an 8–20 hour threshold, so you’re not caught off guard when the final regulations land.
Start thinking about your rota and notice processes now. Even without a final reasonable notice period confirmed, tightening up how far in advance shifts are set — and how changes are communicated — will put you ahead of the curve regardless of where the final rules settle.
The Takeaway
Nothing changes today. But 2027 will arrive with a new statutory framework for zero and low hours working, and the shape of it is still being written. Businesses that engage with the consultation and start reviewing their contracts and rota processes now will have far more room to adapt than those who wait for the final regulations to land.
Want help reviewing your zero hours or casual contracts ahead of the changes? Get in touch with the Cheviot HR team — we can help you work out where you stand.