What the Government's new consultation means for employers
The Government’s consultation on zero and low-hours contracts closed on 25 August 2026, marking the end of a significant period of engagement with employers, workers and other stakeholders. Whitehead Monckton solicitor Rebecca Lister explores the proposals that could reshape the UK’s flexible working landscape and what employers should be doing while they await the Government’s response, expected in November 2026.
The consultation sought views on measures aimed at addressing what the Government has described as “one-sided flexibility” in zero-hours and low-hours contracts. The proposals, which would be introduced under the Employment Rights Act 2025 (ERA 2025), could represent a significant shift in how flexible working arrangements operate. At the heart of the reforms are new rights for qualifying workers, including the right to be offered guaranteed hours, greater certainty over shift patterns and compensation for shifts cancelled at short notice.
While the final details remain subject to the Government’s response and any subsequent regulations, the consultation provides a strong indication of the direction of travel and the changes employers may need to prepare for.
The consultation focused on the following key areas:
One of the most significant proposals is a new right for certain workers on zero-hours and low-hours contracts to be offered guaranteed hours.
To qualify, a worker would need to be employed on a zero-hours contract or work below a yet-to-be-defined contracted hours threshold. During the consultation, the Government proposed a threshold of between eight and 48 hours per week, with a preference for eight to 20 hours.
The offer of guaranteed hours would be based on a worker’s hours over a “reference period”. The Government’s preferred option was a 12-week reference period, although 26 and 52-week periods were also considered.
The consultation also sought views on:
Employers would not be required to make a guaranteed hours offer where a fixed-term contract is shorter than the reference period and the limited term is reasonable, such as where the work relates to a specific task, event or temporary need.
The consultation also explored how workers could be provided with greater certainty over their working patterns.
The Government proposed requiring employers to provide reasonable notice of shifts, with potential notice periods ranging from one to four weeks for directly engaged workers. Different options were considered for agency workers, including shorter notice periods of up to five days.
Views were sought on the circumstances in which longer notice periods should be expected and when shorter notice could be justified, such as where an employer is responding to unexpected absences or operational demands.
The ERA 2025 will introduce a right to compensation where shifts are cancelled, moved or curtailed at short notice, but the consultation sought views on how this right should operate.
Key questions included:
The Government proposed compensation rates based on either a percentage of expected earnings or a payment linked to the National Minimum Wage/National Living Wage, with various percentage bands under consideration.
The consultation also examined how the new rights should be enforced.
While employment tribunals would retain a central role, the Government proposed giving the Fair Work Agency (FWA) powers to enforce short-notice payment obligations. These powers could include:
The proposed penalty regime would allow the FWA to impose penalties of 50% of any arrears owed, subject to a minimum penalty of £100 and a maximum of £5,000 per worker.
Although the consultation has now closed, employers should not assume that no action is required until the Government publishes its response. The proposals signal a clear move towards reducing uncertainty for workers while placing greater obligations on employers to provide predictability and stability in working arrangements.
The Government is expected to publish its response in November 2026, which should provide greater clarity on key issues such as eligibility criteria, reference periods, notice requirements and compensation levels. Whilst some aspects of the proposals may change following consultation feedback, it is unlikely that the overall policy direction will alter significantly.
In the meantime, employers should consider:
Taking proactive steps now will place employers in a stronger position to respond once the Government’s proposals are finalised and help ensure that flexible working arrangements remain effective and compliant in the changing employment law landscape.
Whitehead Monckton’s Employment lawyers are dedicated to the success of your business, taking time to understand your objectives and ethos to enable us to offer practical and commercially focused advice based on your specific needs.
