The Department for the Economy published its official response to the 'Good Jobs' consultation on 25 April 2025 following a 13-week public consultation exercise between July and September 2024. Whilst it's clear that the Department is proposing to make significant changes to the law on zero-hours contracts in Northern Ireland, it does not plan to ban zero-hours contracts altogether.
In its response paper, the Department says it intends to legislate to clamp down on what it calls 'exploitive' zero-hour contracts, with a view to striking a fairer balance between genuine flexibility for employers, and certainty for workers who are engaged on a 'casual' basis.
We have previously outlined the current law on zero-hour contracts and how they are used in Northern Ireland here. Below, we outline the proposals being taken forward by the Minister for Economy, Dr Caoimhe Archibald, for Executive approval, and how these may ultimately impact employers in NI.
What are the proposed changes to zero-hours contracts?
A combination of factors, including the pandemic, advances in technology and the cost-of-living crisis, have led to a significant increase in the use of zero-hours, sometimes called 'casual', contracts in recent years. According to the Office for National Statistics, it was estimated that in early 2024, around 16,000 people in Northern Ireland were engaged on this type of contract and, and that they were especially prevalent within certain minority groups, particularly women and immigrants.
This type of contract provides significant flexibility for both parties, enabling employers to manage fluctuating demand and enabling individuals to fit work around other commitments. However, in recent years they have been the subject of scrutiny and debate. The reasons for this are wide raging but largely boil down to the potential for uncertainty and insecurity for the individual worker. The Department's response to the consultation on this issue outlines various key proposals to stamp out abusive practices, whilst also maintaining a level of flexibility for workers who benefit from these arrangements. The key proposals include: -
- Allowing workers to request 'banded hours' contracts: The proposal is that some zero and low hours workers who 'consistently and regularly' work more than their zero-hours contract suggests, would be able to request a contract more accurately reflecting their real hours after a certain period of work. These requests could potentially be refused by the employer in limited circumstances, which will be set out in future regulations.
- A requirement for employers to inform workers of their right to request a banded hours contract in the employment statement to be provided on day one of their appointment, to promote greater transparency around this type of work arrangement.
- A requirement for employers to give reasonable notice of shift patterns to those on low or zero-hours contracts. What 'reasonable notice' means isn't yet clear.
- Compensating low or zero-hours workers if a shift is cancelled or shortened at short notice. Again, the rate of compensation and in what circumstances it should be paid needs to be clarified.
- Banning Exclusivity Clauses in contracts that do not guarantee income above the Lower Earnings Limit (currently £125 per week).
How might 'banded hours' contracts work in practice?
GB is also reforming its approach to use of zero-hours contracts under its new Employment Rights Bill which we wrote about here and here. The proposal to allow staff to request 'banded hours' contracts is quite a significant departure from the approach taken by Westminster, which focuses more on minimum levels of 'guaranteed hours' for casual workers. The Department's proposal in NI aligns more closely with the existing legislative framework for zero-hours contracts in the Republic of Ireland, where staff already have a right to move to a contract which more accurately reflects their true working pattern in some circumstances. This was also the approach proposed in a draft bill in NI in 2022, but which was never progressed.
Interestingly, in our stakeholder survey on the proposals for reform being consulted on, only 15% of respondents were in favour of this approach, with more predictable hours being the preferred option. However, the Department reports that 51% of the respondents to the consultation supported this approach.
If and when the 'banded hours' approach is adopted in Northern Ireland, it will allow staff to request to work a fixed, average weekly workload within a specified band of hours instead of a zero-hour contract with potentially fluctuating hours. The response does not go into detail about what the proposed 'bands' might look like, but in the Republic of Ireland, there are currently 8 different bands, ranging from 3-6 hours per week to 36 or more hours per week. It is possible we may adopt a similar approach.
Qualifying period
There is also no clarity over exactly what the qualifying period will be before a worker will be entitled to make a request to move to a banded hours contract, but the Department response suggests the qualifying period 'may' be 26 weeks. This would make sense, given that a worker will need to demonstrate that they are regularly working above a certain level of hours each week for a relatively sustained period.
Exceptions
In its response, the Department acknowledges that some employers have a real and legitimate need to flex staffing arrangements, such as those with fluctuating seasonal work or with short-term events. The response refers to the framework in the ROI as an example of a system which allows 'a series of exceptions to the norm in very specific circumstances'.
For example, a bar worker starting on a zero-hour contract in July might expect to have a busy summer period and then a further busy festive period between November and December. Under the proposals, by January, that worker might have acquired the right to request a banded hour contract based on the previous busy periods, but this might still not be a desirable result for employers in the industry generally, since January tends to be a quieter period. There may therefore be some exceptions for certain employers in certain industries.
Right to request
Workers won't be under any obligation to request a banded hours contract and, of course, more casual arrangements do serve certain groups of workers particularly well, including students and parents or carers. It is therefore anticipated that employers will receive requests for banded hour contracts from employees who would benefit from more regular guaranteed hours, and we expect that there will be a requirement for employers to respond to such requests within a specified timeframe. In the Republic of Ireland, employers are afforded 4 weeks to respond to similar requests.
How might reasonable notice of shifts and compensation work in practice?
Although the introduction of banded hour contracts would diverge
from the approach to 'guaranteed hours' taken in GB, the
intention to grant zero-hour and low-hour workers reasonable notice
of shift patterns, along with compensation for cancelled or
curtailed shifts at short notice, is more closely aligned with
other changes to zero-hours contracts in GB.
Further consultation will be needed before we know how much notice
must be given, how compensation will be calculated, and what
exceptions may apply. However, If the NI approach mirrors that in
GB, then this is likely to mean a specific minimum amount of time
before the shift is due to start.
Compensation
It also seems likely that compensation will need to be proportionate to the cancellation or curtailment, as is the approach taken in GB. The level of compensation may also vary depending on how much notice is given of the changes. For obvious reasons, the maximum payment should not exceed the pay the worker would have earned if they had worked the cancelled or curtailed shift, and any payment due under the worker's contract can be counted towards the statutory payment required, and vice versa.
Exceptions
We don't yet know if there are exceptions for last-minute changes, but it seems likely that compensation is unlikely to be payable if such changes are outside the employer's control. For example, an employer may consider it necessary to close a workplace because of health and safety concerns, such as because of civil unrest or unexpected damage to the building. There may also be variety of commercial reasons why employers may need to cancel a shift on relatively little notice, and it may well be that regulations will set out further exceptions, perhaps including an exception for those earning above a certain salary.
Exclusivity clauses
Unsurprisingly, the Department plans to ban exclusivity clauses in zero and low hours contracts which do not guarantee an income above the Lower Earnings Limit. Exclusivity clauses have long been banned in other parts of the UK, and this proposal goes some way to protecting more vulnerable workers in NI.
What might these changes mean for NI employers?
It seems likely that this development will have the biggest impact in the events and hospitality sector in Northern Ireland, which has also been particularly challenged by the additional costs involved in rises to the National Minimum Wage and to Employer's National Insurance Contributions.
Whilst further detail is awaited, and a draft bill is anticipated in January 2026 at the earliest, employers in NI can take a number of steps to prepare for the changes:
- Contract Review: If you do use zero or low hours contracts, review how they are operating in practice in your business. If some workers are regularly working over their contracted hours each week, think about whether you may need to change your approach since these may be open to challenge under the new banded hours regime.
- Shift Management: Consider auditing shift patterns to see how much notice of changes staff tend to receive at present and to identify where the main challenges are likely to be in terms of making changes.
- Communication: Explore whether you may need to alter how you communicate with staff (especially in areas of the business where changes may be needed at short notice). Consider whether a tech solution might enable you to contact or reschedule staff shifts quickly. You may also want to consider whether any changes or updates are needed to the information you hold and the basis on which you hold and process data for data protection purposes.
- Exclusivity Clauses: Consider removing exclusivity clauses in any contracts that fall below the Lower Earnings Limit.
- Record Keeping: Keep accurate records of hours worked in advance, to allow you to support or respond to any banded hours requests and demonstrate compliance.
Finally, make sure to monitor future developments in this space. The Department for the Economy's proposals represent a significant step towards greater protection and certainty for zero and low hours workers in Northern Ireland. Whilst these changes (if agreed) will not be happening quickly, further guidance and regulatory detail will start to flow as the Department consults on the specifics of these reforms.
The 'Good Jobs' Employment Rights Bill consultation response is available here.
Our NI Employment Law Reform Impact Hub is available here and our Dashboard with a full analysis of all the proposals is available here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
