The Employment Rights Act 2025 promised an end to one-sided flexibility in the labour market, but it left the hardest questions unanswered. How many hours is too few before a worker deserves a guaranteed offer? What counts as fair notice of a shift? Those questions, and dozens like them, are now the subject of a government consultation that opened on 2nd June 2026 and runs until 25th August 2026.
The Act, which received Royal Assent on 18th December 2025, sets out three new rights for workers on zero hours and low hours contracts: a right to guaranteed hours, a right to reasonable notice of shifts, and a right to payment when shifts are cancelled, moved or cut short at short notice. None of these rights is in force yet. The detail that will actually determine how they work in practice, the thresholds, the time periods, the percentages, still has to be settled through secondary legislation, and this consultation is where employers get their say.
For employers who rely on flexible staffing, particularly in retail, hospitality, care and seasonal sectors, the outcome will determine how much administrative burden the new rights actually create. The questions posed cover everything from which workers qualify, to how guaranteed hours offers should be calculated, to what penalties should apply when employers get it wrong.
The right to guaranteed hours
At the heart of the reforms is a duty on employers to offer guaranteed hours to workers whose contracted hours fall below a threshold yet to be fixed in regulations. The government has proposed a range running from 8 to 48 hours a week, with a stated preference for somewhere between 8 and 20 hours. Workers who qualify would be entitled to an offer reflecting the hours they actually worked during a defined reference period, calculated either as a mean or median average. A median calculation would reduce the influence of unusually busy or quiet weeks, which the consultation suggests may produce a fairer reflection of a worker’s normal pattern.
The initial reference period is proposed at 12 weeks, though the government is also testing appetite for 26 or 52 weeks. Subsequent reference periods could run on a rolling basis immediately after the first, or with a gap in between during which employers would not need to track hours for guaranteed hours purposes. Workers will also need to meet regularity requirements before they qualify. Two models are on the table; a simple requirement to have worked in a minimum number of weeks within the reference period, or a tougher combined test requiring both a minimum number of weeks and a minimum number of hours above the worker’s contracted total.
Seasonal and short-term engagements are addressed separately. Where a contract is genuinely limited to a specific task or a particular event, and is reasonably shorter than the relevant reference period, no guaranteed hours offer will be required. The consultation is seeking examples of other types of temporary need that might justify the same treatment, since the current wording only expressly covers task based and event-based work.
Reasonable notice and payment for short notice changes
The second and third strands of the reforms deal with shift notice and compensation. Workers below a separate hours threshold, which may or may not match the guaranteed hours threshold, would be entitled to reasonable notice of their shifts and to a payment if a shift is cancelled, moved or curtailed at short notice. The consultation proposes that what counts as reasonable notice should be presumed in regulations, with options of one, two, three or four weeks put forward as a starting point for tribunals.
Short notice itself cannot, under the Act, be defined as more than seven days, and the consultation tests options of one, two, three, five or seven days. The government is also weighing up whether to create a separate “very short notice” category attracting a higher payment. On the amount itself, the proposal is that compensation should be calculated as a percentage of what the worker would have earned, either at their normal rate or at the National Minimum Wage rate, with percentage options ranging from 10% to 80% under consideration.
Crucially, the duty to pay would not apply where the worker initiates the change, for example by calling in sick or swapping a shift voluntarily. Employers would, however, remain liable where a client with authority to instruct on their behalf cancels or alters a worker’s shift directly.
Enforcement and the Fair Work Agency
The Act gives the employment tribunal system primary responsibility for enforcing the zero hours measures, but the consultation proposes a role for the newly created Fair Work Agency too, focused specifically on short notice payments. The Agency began operating in April 2026 and already enforces National Minimum Wage compliance through a Notice of Underpayment regime. The government’s preferred approach would extend that same mechanism to short notice payments, with a default penalty set at 50% of the arrears owed, a minimum of £100 per case and a maximum of £5,000 per worker. Employers who pay the worker in full and settle at least half the penalty within 14 days would have the penalty treated as fully discharged.
Agency workers
The reforms extend to agency workers as well as directly engaged staff, though the mechanics differ to reflect the three way relationship between agency, hirer and worker. Hirers will generally carry the duty to make guaranteed hours offers, while agencies will be responsible for short notice payments, with the ability in most cases to recoup those costs from the hirer. The consultation asks largely parallel questions for agency workers on thresholds, reference periods and notice periods, recognising that some parameters may need to be set differently given how agency work operates in practice.
What this means for employers now
Although none of these rights take effect immediately, businesses that rely on zero hours or low hours arrangements have a genuine opportunity to influence how the final regulations are drafted. The questions around the hours threshold and the length of reference periods are likely to have the most significant practical impact, since a low threshold combined with a short reference period would bring more workers into scope more quickly and increase the frequency with which guaranteed hours offers need to be calculated. Businesses with seasonal or fluctuating demand may also want to engage with the questions on what counts as a genuine temporary need, since the current proposals only clearly protect task based and event based engagements.
Responses to the consultation can be submitted through the online survey, by email to zerohours.consultation@businessandtrade.gov.uk, or in writing to the Employment Rights Directorate at the Department for Business and Trade. Given the breadth of the questions and the practical consequences for staffing models, employers using flexible contracts would be well advised to start reviewing their current arrangements now, well ahead of the regulations being finalised.
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.
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