Zero-Hours Contracts — What's Changing and When
Around 1 million UK workers are on zero-hours contracts. The Employment Rights Act 2025 introduces two separate sets of changes. From October 2026: shift notice and cancellation payment rights. From 2027 (exact date subject to secondary legislation): the right to guaranteed hours based on a reference period. If you use zero-hours or variable-hours arrangements, here is what the law requires and how to prepare.
What is changing and why?
Two separate changes — different dates
- October 2026: Right to reasonable shift notice and payment for cancelled shifts (ERA 2025, s.3–4)
- 2027 (date TBC by secondary legislation): Right to be offered guaranteed hours based on a reference period (ERA 2025, s.1–7)
The Employment Rights Act 2025, sections 1 to 7, introduces the right to be offered guaranteed hours reflecting the hours workers actually work. The reference period (expected to be around 12 weeks) and exact commencement date are subject to secondary legislation — the right is expected to take effect in 2027, not October 2026.
The rationale is straightforward. Zero-hours contracts can offer genuine flexibility that some workers value. But they can also be used by employers to shift financial risk onto workers — keeping them available without committing to any income. A worker who consistently works 25 hours a week has no certainty about whether those hours will continue, making it difficult to budget, access credit, or plan childcare.
The new law does not ban zero-hours contracts outright. Instead, it creates a mechanism: if a worker consistently works a regular pattern of hours over a reference period, the employer must offer them a contract that reflects that pattern. The worker can choose to accept or decline.
How the reference period works
The core mechanism works as follows:
- Reference period. The Act establishes a reference period (expected to be 12 weeks, with the exact duration confirmed in secondary legislation). The employer looks at the worker's actual hours during this period.
- Offer of guaranteed hours. If the worker has worked a regular pattern over the reference period, the employer must offer a contract reflecting those hours. "Regular" means the worker has consistently worked hours and the pattern is sufficiently stable — not occasional or one-off shifts.
- Worker's choice. The worker is under no obligation to accept the offer. They can choose to remain on a zero-hours arrangement. The right is to an offer, not a mandatory change of contract.
- Repeat offers. If the worker declines but continues working a consistent pattern in the next reference period, a new offer must be made.
Which sectors are most affected?
Zero-hours and low-hours arrangements are concentrated in a handful of sectors. These businesses need to start preparing now:
Hospitality (restaurants, hotels, bars, cafes)
Hospitality employs around 350,000 workers on zero-hours contracts — the largest single sector. Staffing is often highly variable, but many workers (kitchen porters, waiting staff, housekeeping) work consistent shifts week to week. These workers are exactly who the legislation targets. Hospitality businesses need to audit who works regular hours and prepare to offer contracts.
Retail
Retail uses zero-hours contracts heavily for weekend and seasonal staff. The impact will be felt most by larger retailers with bank staff who regularly cover predictable shifts. Businesses that genuinely use workers unpredictably (holiday cover, last-minute sickness) will have less exposure, provided workers do not develop a consistent pattern.
Social care
Domiciliary care providers and residential care homes often use zero-hours contracts for carers. In practice, many carers work fixed regular runs (the same clients at the same times). These will trigger the guaranteed-hours obligation. Care providers also face the added complication that the Fair Work Agency (launched 7 April 2026) already has enforcement powers in this sector.
Logistics and warehousing
Warehouses using bank staff or agency workers who work consistent patterns over the reference period will need to offer guaranteed hours. Businesses that genuinely use workers only for peak periods (e.g. Christmas) are less affected — the pattern must be consistent across the reference period.
What employers need to do — October 2026 and beyond
- Audit your zero-hours and variable-hours workforce. List every worker who is not on a contract guaranteeing a fixed number of hours. For each, look at their actual hours over the past 12 weeks. If a pattern of regular hours is emerging, they are likely to trigger the right.
- Review your scheduling processes. How do you decide who gets shifts? If a small group of zero-hours workers reliably gets all the shifts, they will build up a reference period pattern. Consider whether you want to rotate more genuinely, or accept that regular workers will need to be offered guaranteed hours.
- Prepare contract templates. You will need a guaranteed-hours contract template ready to offer to qualifying workers when the guaranteed hours right takes effect (expected 2027 — exact date subject to secondary legislation). This should reflect the average hours worked and the working pattern.
- Act on shift notice rules now — October 2026. From October 2026, you must give workers "reasonable notice" (expected to be at least 72 hours) before scheduling a shift. If you cancel a shift without reasonable notice, you owe the worker payment. This takes effect before the guaranteed hours right — update your scheduling practices now.
- Communicate with workers. Workers are likely to have heard about these changes. Be transparent about what you are doing and when they can expect an offer if they qualify.
Frequently asked questions
Does this affect agency workers?
The provisions apply to "workers" in the legal sense, which includes those engaged directly by a business on a zero-hours basis. Agency workers supplied through a staffing agency are in a different position — they have a contract with the agency, not the end-user. Secondary legislation will clarify how agency arrangements interact with the reference period rules.
What if a worker genuinely wants to stay on zero-hours?
Workers can choose to remain on a zero-hours arrangement. The right is to receive an offer — not to have their contract changed automatically. If a worker declines the offer, they can continue working on their existing terms. However, refusing a worker who wants guaranteed hours is not an option.
Does this only apply to zero-hours contracts, or low-hours contracts too?
The provisions apply to workers on zero-hours contracts and also to workers on low-guaranteed-hours contracts where the hours they actually work are consistently higher than those guaranteed. For example, a worker on a 4-hours-per-week contract who regularly works 20 hours would be covered.
Is there a minimum number of hours that triggers the right?
Secondary legislation will set out the exact threshold. The Act requires a pattern to be "regular and consistent" — workers who genuinely work very variable hours with no pattern should not trigger the right. The detail matters and we will update this guide when the secondary legislation is published.
Sources:
Employment Rights Act 2025, sections 1–7 (right to guaranteed hours).
Department for Business and Trade impact assessment.
ACAS guidance on zero-hours contracts.
Last updated: 12 April 2026. Secondary legislation details pending for guaranteed hours commencement.