Employers will be aware that one of the most publicised sets of provisions introduced by the Employment Rights Act 2025 (ERA) was that relating to zero or ‘low’ hours contracts and guaranteed hours. Once introduced, these provisions will provide the following key rights for workers (including agency workers):
Guaranteed hours: a duty on employers to offer a guaranteed hours contract that reflects the hours, qualifying zero and low-hours workers regularly work over a reference period;
Reasonable notice of shifts: a duty on employers to provide reasonable notice of shifts; and
Compensation for cancelled, moved or curtailed shifts: workers will be entitled to compensation if their shift is cancelled, moved or curtailed at short notice.
It is anticipated that these provisions will come into force some time in 2027. However, despite taking up a significant proportion of the lengthy Act, many of the key details that inform exactly how these provisions will impact employers and workers will be set out in regulations that are yet to be published.
The government took a step forward on the road to drawing up these crucial details / regulations by publishing a much-anticipated consultation on 2 June 2026. Suzanne Nulty looks at whether the consultation represents a confident stride forward or a hesitant stumble.
What we’ve been waiting for
The consultation, which will run from 2 June until 25 August 2026 seeks input on some of the key pieces of missing information that have been identified by us previously, such as:
Low and zero hours
Definition of ‘low hours’
The government’s preference is said to be between 8 and 20 hours per week but seeks views on anything up to 48 hours per week. On the face of it, setting the threshold at 48 hours would appear to run counter to the notion of ‘low hours’.
For agency workers, we are asked whether this threshold should apply to each individual hirer arrangement or across all hirers by whom the agency worker is engaged at any one time. The logistical and practical implications of the latter option are potentially incredibly complicated in our view.
Length of the reference period for calculating average hours worked by low or zero hours workers
The government’s proposed 12 weeks remains its preference, but the consultation gives options of much longer periods of 26 or 52 weeks
Regularity of work
In addition to meeting the ‘low hours’ threshold, workers must have worked for a set proportion of time to qualify for the guaranteed hours protection afforded by the Act.
The government sets out two potential options for calculating the regularity test. It does not express a preference for either and is open to considering others:
Option A / Weekly distribution: hours worked during the reference period need to have been worked over at least X weeks. The government gives the example of working during 8 of the 12 weeks of the initial reference period to qualify. This tests how many weeks a person worked, regardless of how many hours they worked during those weeks. This is considered an inclusive method of calculation as protects workers who may work low hours but have consistent weekly work.
Option B / weekly distribution plus an overall minimum hours requirement. The worker must meet the weekly threshold as well as a minimum total of “excess hours” above their core contractual hours over the reference period. The government’s possible hours thresholds, based on a 12-week reference period) are less than 48, 48, 72 or 96 hours. Option B would make it more difficult to qualify for a guaranteed hours offer, adds another layer of complexity and thus seems likely to cause confusion for employers and employees alike. It is likely designed to filter out workers who perform occasional low-level voluntary overtime so that a permanent contractual change would not be available in those cases.
The complexity, wide range of options on the table and the government’s lack of preference leaves the impression that this aspect is not a complete proposal at this stage.
Seasonal work
What carve out is appropriate for circumstances where there is a ‘temporary need’ such as for seasonal work?
The government requests examples of temporary need so it can design the regulations to accommodate these appropriately.
What the guaranteed hours offer from the employer will look like
The consultation asks:
Should the hours offered be based on median or mean calculations?
Should there be flexibility to offer the hours on a weekly, monthly, or other basis?
Should a small ‘adjustment margin’ be permitted so that the offer can be slightly different to the calculated hours to (1) offset the risk of a technical legal breach where there has been a calculation error or (2) where it helps to align the offer with working patterns of the employer’s workforce? Examples given are 2 hours or 10% variation parameters.
Exemptions
The government intends these to apply in limited circumstances and gives the following as possible examples:
for specific categories of workers – e.g. those who have two contracts with an employer, one of which is above the hours threshold. This ‘two contracts’ exemption would seemingly assist NHS employers whose staff take up extra shifts via their Trust’s bank arrangements; and / or
in exceptional circumstances – e.g. flooding of premises which causes a cessation in trading.
The consultation requests respondents to specify particular types of workers and circumstances they think should be excluded or exempted. These are questions are mirrored for agency workers.
Separate questions relating to agency workers also include reference to when the duty to offer guaranteed hours should move from the hirer to the agency or other intermediary.
Reasonable and short notice
Threshold
The government says it intends that only those with zero or lower levels of guaranteed hours will be covered under these provisions for minimum notice of shifts.
The consultation sets out:
options from 8 to 48 hours per week in four-hour increments.
questions about excluding agency workers from these protections if their agency guarantees them a total number of hours with a hirer or various hirers.
It arguably makes sense that those with fewer hours need appropriate notice of their shifts as they are likely to need to plan to fit those few hours in amongst other work or family commitments. Therefore, those who are guaranteed more hours will not have this protection regarding the amount of notice they are entitled to.
What is reasonable notice in normal circumstances?
The government asks should this be set at 1, 2, 3, 4 weeks’ notice or something else?
It also asks about circumstances in which longer or shorter notice may be reasonable.
Definition of ‘short notice’
Should this be 1,2,3,5,7 days or something else?
Should there be a ‘very short notice’ definition, which would attract higher levels of payment if a shift is cancelled etc? If so, the options for very short notice are: less than 1 day, 1, 2, 3, 5, 7 days or something else.
Short notice payments
The government intends these will be calculated as a percentage of the actual pay or the living / NMW rate that would have applied to the missed work. The percentage options are: 10%, 30%, 50%, 65%, 80%, other.
Applying the same principles, the options given for very short notice payment are: 30%, 50%, 65%, 80%, other.
Exceptions
Views are invited as to whether some hirers should be exempted, such as vulnerable adults hiring agency staff for care. Other examples are requested. Again, this crucial detail is potentially very significant. If, for example, NHS bank workers were exempted this would make a huge difference to how the provisions will affect NHS organisations.
Similarly, are there circumstances where short notice payments should not apply such as extreme weather events or a widespread power outage affecting the employer / hirer’s need for the work to be undertaken?
Some unexpected aspects
However, it also asks questions about new issues which were unexpected such as:
Should subsequent reference periods be of a different length to the initial one?
If so, should they be 26 or 52 weeks, or some other period?
Should there be a break between reference periods?
This might make sense and help with practicalities and logistics by allowing time for the offer and consideration periods to take place but will it reduce the effectiveness of the regime? Are hours worked during the break period simply discounted entirely for guaranteed hours calculation purposes?
Should there be ‘very short notice’ provisions attracting higher compensatory payment rates?
See above for details
Enforcement
Under the current proposals, the tribunal does not have the power to impose a guaranteed hours contract if one has not been offered. However, workers dismissed for seeking to exercise or enforce their rights to guaranteed hours or notice of shifts etc will have potential employment tribunal claims for automatically unfair dismissal. And those who suffer a detriment on those grounds will have a potential claim which, if successful, will attract just and equitable compensation.
In addition, the government proposes that the Fair Work Agency will be able to impose fines under its Notice of Underpayment regime from between £100 and £5,000 per worker in cases of non- or under-payment of short notice payments.
What’s still not clear
The consultation doesn’t address some other crucial points that need sorting before draft regulations can be put together, which leads some of us to wonder whether there might need to be another consultation in due course. For example:
When a guaranteed offer needs to be made by an employer, the provisions only address an increase in hours; but surely such an offer will need to address the working pattern within which the hours will take place. The consultation doesn’t seek views on what guardrails are needed around this crucial aspect of the offer.
The Act provides for an upper limit on the financial loss compensation a tribunal may award in the event of a breach by an employer, but this is not yet set and wasn’t addressed in this consultation.
Comment
The breadth of the questions asked and the options put forward make this feel more like an early pre-legislation consultation rather than one honing the detail of a clear policy plan. Depending on which way the government goes with some of the fundamentals will substantially affect how significant and challenging this flagship part of the ERA will be in practice for employers.
So, what can organisations do now?
Respond to the consultation
Given that there seems to be so much still to be settled, there may be an opportunity to influence the government’s approach particularly if employers highlight any potential challenges posed by the proposals that may be considered ‘unintended consequences’.
Check IT system capabilities
Check IT system capabilities re:
Monitoring individuals’ (agency and directly engaged employees / workers) hours worked vs contracted hours
Producing reports on hours worked in the previous [12 weeks] on a rolling basis;
Alerting the organisation / HR / managers when contractual hours limit is exceeded over an average 12 week rolling period.
Interaction with HR re offering guaranteed hours when triggered
Monitoring the amount of notice given when cancelling or shortening shifts
Interaction with payroll re calculation of short notice payments when triggered
Audit low and temporary / bank workers patterns of working hours
Who works regular patterns?
Who regularly exceeds nominal contract hours?
Which workers may qualify for guaranteed hours?
Which departments or teams rely on temporary / bank etc workers?
Is the organisation satisfied that the way these are utilised currently is appropriate / necessary? Are there alternative ways of working?
Model the costs exposure of guaranteed hours being offered based on hypothetical low hours thresholds of, say, 10/15/20 hours
Stress test staffing budgets
Start managing those that have regular working patterns and consider offering permanent contracts
Review any seasonal staffing fluctuations
When booking temporary / bank work in, do any departments or teams cancel or change the shift details? If so, how much notice is given? What level of threshold would cause your organisation a concern?
As further specifics about these provisions develop, we will naturally keep you up to date on the legal details, but also update this list of practical considerations and actions for employers. This will undoubtedly include training programmes for your organisation especially for staffing teams and managers who use zero and low hours contracts. They will need to appreciate, for example, that any current practices of ‘casual’ or last-minute shift bookings or variations will have financial consequences as well as additional hours affecting workers’ hours threshold calculations, which may result in an obligation to increase hours on a permanent contractual basis.
Previous insights in our ERA Series
Employment Rights Act Series: Protected Disclosures: Sexual Harassment (Partner, Saira Ali) 30 April 2026
Employment Rights Act Series: Further consultations on redundancy, industrial action, and agency work (Principal Associate, Louise Singh) 30 March 2026
Employment Rights Bill Series: Amendments to zero-hours contracts provisions (Principal Associate, Suzanne Nulty) 29 April 2026
Employment Rights Act Series: April 2026 changes spring into force – practical considerations for employers (Partner, Mark Landon and Principal Associate, Suzanne Nulty) 27 March 2026
Employment Rights Act Series: Further consultations for Spring 2026 (Principal Associate, Louise Singh) 25 February 2026
Employment Rights Act Series: New trade union law now in force and updated timeline (Principal Associate, Louise Singh) 25 February 2026
Employment Rights Act Series: Redundancy collective consultation: Doubling down on recalcitrant employers by doubling up on protective awards (Principal Associate, Suzanne Nulty and Legal Director, Victoria Duddles) 29 January 2026
Hark! The Employment Rights Act 2025 is nigh… (Partner, Nick Newman and Principal Associate, Louise Singh) 17 December 2025
Employment Rights Bill Series: Four ‘autumn 2025’ consultation launched (Principal Associate, Matt Smith) 24 October 2025
Employment Rights Bill Series: Amendments to zero-hours contracts provisions (Principal Associate, Suzanne Nulty and Principal Associate, Louise Singh) 07 August 2025
Employment Rights Bill Series: Amendments to the Fire and Re-hire provisions (Legal Director, Ross Hutchison) 22 July 2025
Employment Rights Bill series | July amendments: NDA changes and more (Principal Associate, Louise Singh) 13 July 2025
Employment Right Bill Series: Implementation Roadmap – a long and winding road (Principal Associate, Suzanne Nulty and Partner, Mark Landon) 08 July 2025
Employment Right Bill Series: House of Lords Stages completed (Principal Associate, Suzanne Nulty) 26 June 2025
Employment Rights Bill Series: The House of Lords Stages so far (Principal Associate, Suzanne Nulty) 6 June 2025
Employment Rights Bill Series: Employment Rights Bill moves from Commons to Lords (Principal Associate, Suzanne Nulty) 25 March 2025
Employment Rights Bill Series continued (Principal Associate, Suzanne Nulty) 7 March 2025
Employment Rights Bill Series: Zero Hours Contracts and Guaranteed Hours: A Zero-Sum policy? (Principal Associate, Louise Singh) 27 January 2025
Employment Rights Bill Series: Small but significant changes to the statutory sick pay system (Principal Associate, Ashley Powis) 13 December 2024
Employment Rights Bill Series: First set of proposed amendments: what it means and what to expect (Principal Associate, Suzanne Nulty) 6 December 2024
Employment Rights Bill Series: Further rules on fair tipping (Principal Associate, Ashley Powis) 3 December 2024
Employment Rights Bill Series: Dismissal and Re-engagement - Tying the Hands of employers? (Legal Director, Ross Hutchison) 22 November 2024
Employment Rights Bill Series: The Fair Work Agency (Principal Associate, Suzanne Nulty) 15 November 2024
Employment Rights Bill Series: The Pendulum Swings on Industrial Relation (Partner Andrew Forrest and Principal Associate, Louise Singh) 8 November 2024
Employment Rights Bill Series: Day 1 right to claim unfair dismissal (Principal Associate, Suzanne Nulty and Associate, Lauren Barchet) 25 October 2024
Employment Right Bill Series – Flexible Working “Further Flexion” (Principal Associate, Suzanne Nulty) 21 October 2024
The Employment Rights Bill Series: 2024 – What’s in, What’s out, and What’s next (Principal Associates, Louise Singh and Suzanne Nulty) 11 October 2024
