Zero-Hours Reforms: Guaranteed Hours Rules Under ERA 2025

What's Changing: The ERA 2025 and Guaranteed Hours

The Employment Rights Act 2025 (ERA 2025) represents the most significant overhaul of UK employment law in a generation. For businesses that rely on flexible workforce models, one of its most impactful provisions is the introduction of a statutory right for zero-hours and low-hours contract workers to request guaranteed hours - once they've completed a qualifying period of service.

Sectors like retail, hospitality, social care, logistics and seasonal agriculture - where zero-hours arrangements have long been a staffing cornerstone - need to pay close attention. Getting to grips with the new rules now will help you manage your exposure, plan your workforce strategy, and avoid costly disputes further down the line.

What Are Zero-Hours and Low-Hours Contracts?

A zero-hours contract is an arrangement where an employer is not obliged to offer a minimum number of working hours, and the worker is not obliged to accept any hours offered. These contracts offer maximum scheduling flexibility but provide workers with frustratingly little income certainty.

A low-hours contract - also sometimes called a minimum-hours or guaranteed-minimum contract - typically guarantees a small number of hours per week (four or eight hours, for example) but in practice the worker regularly works significantly more.

The ERA 2025 targets both arrangements. It recognises that low-hours contracts can be used to achieve a similar practical effect to zero-hours contracts while nominally providing a contractual minimum. A neat workaround that legislators have clearly decided to close off.

The New Right to Request Guaranteed Hours

Under the ERA 2025, eligible workers on zero-hours or low-hours contracts will have the right to request a contract that reflects the hours they regularly work in practice, once they've completed a qualifying period. Secondary legislation and ACAS guidance will set out the precise procedural detail, but the core framework looks like this:

• Qualifying period: Workers must complete a minimum period of continuous service or engagement before the right arises. The government has signalled this is likely to be 26 weeks, though this will be confirmed in regulations.
• Reference period: The guaranteed hours offered must be based on the worker's actual working pattern over a defined reference period, designed to reflect their normal working week rather than exceptional peaks.
• Employer response: Employers will be required to respond to a guaranteed-hours request within a set timeframe. Refusal will need to be based on specific, permissible grounds - employers cannot simply decline without reason.
• Repeat requests: Workers will be limited in how frequently they can submit a request within any given period, broadly mirroring the existing flexible working request framework.

Key point: This is a right to request guaranteed hours - not an automatic entitlement to receive them. However employers must have a legitimate, permissible reason to refuse, and workers will have recourse to an Employment Tribunal if the process is not followed correctly.

Who Is Covered?

The new right applies to workers - not just employees - which broadens its reach considerably. That means it covers those engaged under a contract of employment as well as those on a worker's contract (sometimes called a limb (b) worker under the Employment Rights Act 1996). Genuinely self-employed contractors, who fall outside the worker definition, are not covered.

Whether an individual qualifies as a worker rather than a self-employed contractor depends on the substance of the relationship, not merely what their contract says. Businesses engaging individuals under casual or freelance arrangements should review those relationships carefully - particularly where there is an obligation to perform work personally and a degree of ongoing integration into the business.

Permissible Grounds for Refusal

The ERA 2025 and supporting regulations are expected to set out the grounds on which an employer may legitimately decline a guaranteed-hours request. These are anticipated to include:

• The business has a genuine operational need for flexibility in that role (for example, genuinely unpredictable seasonal demand).
• The guaranteed hours requested are not consistent with the worker's actual average hours over the reference period.
• Granting the request would cause significant disruption to the employer's operations that cannot reasonably be accommodated.

It's worth noting that simply preferring flexible arrangements, or wishing to avoid employment cost certainty, is unlikely to constitute a permissible ground. Employers will need to document and evidence their reasoning carefully - vague justifications won't hold up.

Practical Steps for SMEs Using Flexible Workforces

If your business currently relies on zero-hours or low-hours contracts, now is the time to act - not wait. Here's a practical checklist to get you started:

1. Audit your flexible workforce. Identify all individuals on zero-hours or low-hours contracts and assess their likely qualifying status. How long have they been engaged? What hours do they typically work?
2. Review contract documentation. Ensure your contracts accurately reflect the nature of the arrangement. Contracts that describe a worker as self-employed but where the working relationship resembles employment carry significant risk.
3. Assess average hours worked. For each zero-hours or low-hours worker, calculate their average weekly hours over recent months. This gives you an early indication of what a guaranteed-hours request might look like and whether it would represent a material change to their contract.
4. Evaluate genuine business need. For each role or category of worker, honestly assess whether variable hours reflect a genuine operational need. Document that assessment. If variable hours are simply a preference or cost-management tool, your exposure to successful requests is higher.
5. Update HR policies and procedures. Introduce or update a guaranteed-hours request procedure before the relevant provisions come into force. Train line managers so they understand the process, the required timeframes and their obligations.
6. Consider proactive contract reviews. Some businesses may find it worthwhile to offer part-time or annualised hours contracts voluntarily to workers who already work predictable hours. Doing so can reduce the administrative burden of managing formal requests and - thankfully - tends to improve staff retention too.

Connected Reforms: Reasonable Notice of Shifts

The ERA 2025 also introduces related rights around reasonable notice of shifts and compensation for cancelled or curtailed shifts at short notice. These provisions work alongside the guaranteed-hours rules and address one of the key practical grievances of zero-hours working: last-minute cancellations that leave workers without income they had genuinely planned around.

Businesses will be required to give workers reasonable advance notice of their shifts and, where a shift is cancelled or significantly reduced without adequate notice, to pay compensation. The precise notice periods and compensation rates will be set out in regulations, but start reviewing your scheduling and communication practices now rather than waiting.

Employment Tribunal Risk

Workers who believe their guaranteed-hours request has been improperly refused - or who are subjected to detriment for making such a request - will be able to bring a claim before an Employment Tribunal. Given that qualifying periods under the new framework are expected to be relatively short, the pool of eligible claimants across the UK workforce will be substantial. That's not a small consideration.

Documenting decisions, following the correct process, and training managers will be essential to defending any such claims effectively.

When Do the Changes Take Effect?

The ERA 2025 received Royal Assent in 2025, but most of its substantive provisions - including the guaranteed-hours rights - will be brought into force through commencement orders, with some reforms staggered over 2025 and 2026. Businesses should monitor government announcements and ACAS guidance closely, as the implementation timetable may still be subject to change.

Action point: Do not wait for commencement orders before beginning your internal review. The preparation required - workforce audits, contract reviews, policy updates - takes time, and leaving it until the last moment increases your legal and operational risk considerably.

Key Takeaways

• The ERA 2025 gives zero-hours and low-hours workers the right to request guaranteed hours reflecting their actual working pattern after a qualifying period.
• Employers must respond to requests within defined timeframes and can only refuse on permissible grounds - preference for flexibility is not enough.
• The right covers workers broadly, not just employees - review whether your casual and freelance arrangements might fall within scope.
• Connected provisions on shift notice and cancellation compensation will also impose new obligations on flexible workforce employers.
• Start your workforce audit and contract review now, ahead of commencement.