The Employment Rights Act 2025 and zero hours workers: what businesses can do to prepare now

One of the most complex elements of the Employment Rights Act 2025 is the new regime of rights for zero hours (and low hours) workers. 

The ERA 2025 creates three key new rights for these workers: 

• to be offered a fixed hours contract based on the hours they have worked in a “reference period”
• to be given reasonable notice of shifts they are required to work, and if a shift is cancelled, moved or cut short
• to receive a compensation payment if a shift is cancelled, moved or cut short at short notice. 

The new provisions are complex for employers to navigate - and this problem is exacerbated by the fact that a lot of the details are to be set out in regulations, which have not yet been published.    These provisions will also apply to agency workers, who will have the right to be offered a permanent contract by the end user client. 

These changes are due to come into force in 2027, although we don't yet have a specific date.   While we await further details and a precise implementation date, there are some practical aspects which employers can start considering now: 

• Compliance will depend on employers carefully tracking workers' hours from the start of their employment or engagement and knowing when a worker qualifies for a guaranteed hours offer.    Employers should assess whether current payroll and shift management systems will enable this to be tracked in real time - and if not, should be discussing with payroll teams and suppliers how to address this.
• The right to reasonable notice of shifts and shift changes (and the right to compensation if a shift is cancelled or changed at short notice) will apply where shifts are offered to several workers at once - unless an individual worker didn't have reasonable grounds to think they would be needed to work the shift.   Employers will need to assess how they currently go about allocating shifts and whether and how workers are told if they are not needed.  Where shifts are allocated through an app, employers should ensure that workers are notified if not needed because someone else has taken the shift. This will also make shift allocation by SMS/WhatsApp more problematic - these informal methods are more likely to lead to breaches. 
• Employers should also review arrangements for swapping shifts between workers, to ensure that this doesn't result in working hours being mis-recorded or cancellation notices being given to the wrong person.   Again, employers which have tolerated an informal approach might have to introduce more structure to avoid falling foul.
• Where workers are entitled to be offered guaranteed hours, this can either be done via a variation of their existing contract or by offering them a new contract. However, aside from changing the working hours, employers are generally prohibited from making other changes to the contract, particularly if they will be less favourable to the worker.   As a result, employers will need to review carefully what's in their zero hours and low hours contracts to ensure that they are suitable for workers with guaranteed hours.  We anticipate that employers will want to include variation, short-time working and layoff clauses, to give themselves as much room for manoeuvre as possible (although we are waiting to see whether the regulations will restrict the use of such clauses in guaranteed hours contracts). 

It's frustrating that we are still waiting for key details of these reforms (such as which “low hours” workers will be covered) over a year after the Employment Rights Bill (now Act) was first published.   However, employers can nevertheless use this time effectively to prepare for the significant operational challenges that these reforms will introduce.