Employment Rights Act: Reforms to zero-hours and low-hours contracts

The Employment Rights Act 2025 represents the most significant reform of UK employment law in a generation. Among the changes are major reforms to the use of zero-hours and low-hours contracts, which are expected to take effect in 2027 (exact date TBC).

The Government has stated that these reforms are intended to “end one-sided flexibility, help people plan their finances and daily lives, or enjoy benefits of a zero-hours contract if they wish to keep one.”

For the education sector, where demand can fluctuate across different areas of operation, these changes may require a fundamental review of workforce planning and resourcing arrangements.

What is changing?

The reforms do not ban zero-hours contracts. Instead, they introduce new rights aimed at providing greater certainty and predictability for zero and low hours workers, including certain agency workers.

The legislation will introduce three key rights:

• A right for qualifying workers to be offered a guaranteed hours contract, reflecting the hours they work over a reference period.
• A right to reasonable notice of shifts.
• A right to compensation where shifts are cancelled, curtailed or moved at short notice.

The most significant of these reforms is the new right to guaranteed hours.

The new right to guaranteed hours

Under the new regime (and subject to eligibility criteria and conditions around the number and regularity of hours), employers will be required to offer qualifying workers a contract that reflects the hours they work during a specified reference period. Regulations will define which workers are excluded from this duty – this is anticipated to be a narrow exemption but we will keep a close eye on the details. 

Employers will be required to make a guaranteed-hours offer to qualifying workers at the end of the initial reference period and each subsequent reference period. The recent consultation considered initial reference periods of 12, 26 or 52 weeks, with the Government expressing a preference for 12 weeks. A subsequent reference period may be longer, with 12, 26 and 52 weeks also being considered. Compliance is very unlikely to be a one-off exercise. Employers are likely to need to reassess eligibility at the end of successive reference periods and make offers until the worker’s contractually guaranteed hours exceed the prescribed low-hours threshold or the worker otherwise falls outside the statutory tests.. There are complex rules around the timing, form and content of the guaranteed hours offer and it remains unclear how the offer of guaranteed hours will be calculated.

Key details of the new duties remain unclear and we are still awaiting the outcome of the consultation and the final regulations. However, the Government has indicated that:

• The reference period is likely to be around 12 weeks.
• The obligation will apply to workers on zero-hours contracts.
• It will also apply to workers on certain low-hours contracts where guaranteed hours fall below a prescribed threshold.
• Agency workers will also be covered by related provisions.

For example, if a worker is engaged on a zero-hours contract but has consistently worked 30 hours per week during the reference period (which is likely to be 12 weeks), the employer may be required to offer a contract guaranteeing those hours, provided the relevant criteria and conditions are met.  Importantly, workers will be able to choose whether to accept such an offer. The aim is to provide greater security where it is wanted, rather than remove flexibility altogether.

What about workers with irregular hours?

One of the key questions for employers is how these reforms will apply where hours vary from week to week.

The legislation extends beyond traditional zero-hours contracts and is intended to capture some low-hours arrangements where workers regularly work significantly more hours than those guaranteed under their contracts. The Government is still consulting on both the threshold that will trigger the right and the methodology for calculating guaranteed hours.

As a result, employers are likely to need to monitor working patterns more closely and identify individuals who routinely work above their contractual minimum.

This may be particularly relevant in the Education sector, where Schools and Colleges often rely on flexible staffing arrangements, including invigilators, cover supervisors, learning support staff, peripatetic music teachers and sports coaches.

Where individuals are engaged on flexible contracts but work regular patterns in practice, employers may need to consider whether they fall within the scope of the new rights. There are also provisions relating to seasonal and temporary work – we await further information on this and how it may apply to particular roles.

New obligations around shifts

In addition to guaranteed hours, employers will be subject to new requirements to provide reasonable notice of shifts and to compensate workers where shifts are cancelled, changed or shortened at short notice.

The details of what will constitute a “low-hours” contract, what amounts to “reasonable notice”, and the level of compensation payable have not yet been finalised. However, employers are likely to have less flexibility to alter working arrangements at the last minute without financial consequences.

These changes could have significant implications for organisations that rely heavily on short-notice scheduling or frequent rota changes.

What should employers do now?

Although much of the detail will be set by regulations, employers can begin by auditing zero-hours, casual and low-hours arrangements; comparing contractual hours with hours actually worked; identifying roles with regular patterns or repeated short-notice changes; and checking whether payroll and rostering systems can retain the data needed across successive reference periods. 

As the consultation response and final regulations have not yet been published, it is not currently possible to confirm exactly which workers will fall within scope or assess the full impact of the reforms. We will continue to monitor developments and provide further updates once the consultation response and regulations are published.