There has been a lot of noise around zero-hour contracts recently. Some of it is useful. Much of it is not.
Here’s what employers need to know.
Zero-hour contracts are not being banned.
However, the government is consulting on a package of new protections for zero-hour and low-hour workers that could significantly change how flexible labour is managed across many sectors.
The consultation opened on 2 June 2026 and closes on 25 August 2026. It focuses on how measures within the Employment Rights Act 2025 should be implemented.
Nothing is final yet.
But the direction of travel is becoming clear, and employers should start preparing now.
What Is the Government Trying to Achieve?
The government’s aim is to tackle what it describes as “one-sided flexibility”.
In practice, this means situations in which employers benefit from flexibility while workers face ongoing uncertainty about hours and income.
The proposals are not intended to eliminate flexible working arrangements. Instead, they seek to ensure that where workers regularly work predictable hours, their contracts better reflect reality.
For many employers, flexible contracts serve a genuine business need.
Demand fluctuates.
Bookings change.
Clients cancel.
Seasonal peaks come and go.
The challenge for employers will be demonstrating when flexibility is genuinely required and when a worker’s pattern has become sufficiently regular to justify greater certainty.
The Proposed Right to Guaranteed Hours
At the centre of the consultation is a proposed right to guaranteed hours.
Under the proposals, workers on zero-hour contracts and potentially low-hour contracts could become entitled to an offer of guaranteed hours if they consistently work beyond their contracted hours during a reference period.
Importantly, workers would not be required to accept the offer. They could choose to remain on their existing arrangement if they prefer the flexibility.
This recognises the reality that many workers, including students, parents, carers and semi-retired individuals, actively choose flexible arrangements.
The issue is not flexibility itself.
It is whether the contract reflects the reality of the working relationship.
Why Low-Hour Contracts May Also Be Affected
Employers should not assume that these proposals affect only traditional zero-hour contracts.
The government is currently considering a threshold of between 8 and 20 guaranteed hours per week.
As a result, workers on low-hour contracts who consistently work significantly more hours could also fall within scope.
For example, an employee contracted for 8 hours per week but routinely works 25 hours may trigger an entitlement to a guaranteed hours offer.
While the final threshold has not yet been determined, employers should begin identifying workers whose actual hours regularly exceed their contractual commitment.
The Importance of the Reference Period
The government’s preferred reference period is currently 12 weeks, although alternatives of 26 and 52 weeks remain under consideration.
A shorter reference period would allow workers to access rights more quickly, but it would also increase administrative demands on employers.
This raises some practical questions:
- Do you know exactly what your casual workers have worked on over the last 12 weeks?
- Can you distinguish between regular working patterns and occasional overtime?
- Do your HR, payroll and rota systems align?
- Could you justify why a worker was, or was not, offered guaranteed hours?
These are questions employers should be considering now.
Regularity Will Be Key
One of the most important issues within the consultation is how “regularity” will be assessed.
The consultation explores several approaches.
One option looks at the number of weeks worked during the reference period.
Another combines this with a minimum number of additional hours worked above contract.
The final definition will be crucial because it will determine when employers become obligated to make guaranteed hours offers.
For many businesses, this could become the defining issue.
Seasonal and Temporary Work
Sectors such as hospitality, retail, leisure, education, care, cleaning and logistics often rely on temporary increases in labour demand.
The consultation acknowledges that genuinely temporary work requires flexibility.
The challenge will be distinguishing legitimate temporary arrangements from ongoing work presented as casual labour.
Employers should begin documenting:
- Why are temporary arrangements needed
- The business rationale behind them
- Expected end dates
- The operational requirement they support
This evidence may become increasingly important if arrangements are challenged.
Shift Notice and Cancellation Rights
The consultation also proposes new rights relating to shift scheduling.
Workers may gain stronger protections around:
- Reasonable notice of shifts
- Reasonable notice of shift changes
- Compensation for cancelled, shortened or moved shifts at short notice
The government is considering notice periods ranging from one to four weeks for directly engaged workers.
It is also consulting on what constitutes “short notice” for cancellations, with options ranging from one to seven days.
The detail remains undecided.
However, the principle is clear: last-minute rota changes may increasingly carry financial consequences.
Employers may therefore need stronger controls around who can amend shifts, why changes are made and how decisions are recorded.
Agency Workers Are Included
These proposals extend beyond directly employed workers.
Agency workers are also within scope.
The consultation explores whether responsibility for guaranteed hours offers should sit with hirers, agencies or intermediaries in different circumstances.
Businesses that rely heavily on agency labour should pay close attention to the outcome, as it may affect workforce planning, contractual arrangements and cost allocation.
What Should Employers Do Now?
There is no need to rewrite contracts overnight.
However, there is a strong case for reviewing your current arrangements while there is still time to prepare.
Employers should ask:
- Are our zero-hour and low-hour contracts being used appropriately?
- Do contracts reflect actual working patterns?
- Are workers consistently working well beyond their contracted hours?
- Do we maintain accurate records of shifts worked, declined, cancelled and changed?
- Do we clearly document temporary staffing requirements?
- Are managers making informal rota changes without oversight?
- Do our agency arrangements expose us to additional risk?
Preparation now is likely to reduce disruption later.
The Real Risk
The greatest risk will not be the wording of the contract.
It will be the reality of the working relationship.
Calling someone a casual worker will not matter if they work the same days every week for months on end.
Describing work as temporary will not help if the requirement is actually permanent.
And labelling a contract as zero-hours will carry little weight if the worker’s pattern tells a different story.
Final Thoughts
This remains a consultation, and the final regulations may evolve significantly before implementation.
Nevertheless, employers should view these proposals as a clear indication of where employment law is heading.
Flexible working arrangements are not disappearing.
However, the casual use of casual contracts is likely to face much greater scrutiny.
Businesses that understand their workforce, maintain accurate records and review their working practices now will be in the strongest position when the final rules arrive.
At Altum HR, we help employers prepare for employment law changes before they become problems. If you’re unsure how these proposals could affect your organisation, get in touch with our team.
