Changes to Zero Hour Contracts

A casual worker agreement is a flexible work arrangement, often called a zero-hours contract in the UK, where there is no obligation for an employer to offer work or for a worker to accept it. These contracts are typically for "as needed" or "on-call" work and lack a guaranteed number of hours, providing flexibility for both parties.

Despite the lack of guaranteed hours, casual workers are entitled to certain statutory rights, such as the National Minimum Wage and statutory annual leave, but they must be correctly classified to ensure these rights are met. 

Casual workers are entitled to receive the National Minimum Wage, protection against unlawful deduction from wages, statutory minimum holiday entitlement, statutory minimum rest breaks, and to not work over 48 hours per week, unless they have opted out.

So what's changing in early 2027...

• Guaranteed hours contracts:

  If a worker has regularly worked a certain number of hours (likely over a 12-week reference period), their employer will be obliged to offer them a contract with guaranteed hours reflecting their regular work pattern.

• Right to reasonable shift notice:

  Workers will have a legal right to receive reasonable notice before a shift is scheduled.

• Compensation for cancelled or changed shifts:

  Employers must provide advance notice of any shift cancellations or changes. If adequate notice is not given, workers will be entitled to compensation

What this means for businesses:

• Review of flexible contracts:

  Businesses using zero or low hours contracts will need to review their practices and begin assessing their systems to ensure compliance with the new regulations. 

• Phased implementation:

  The government is implementing these reforms gradually, with the aim of allowing businesses time to prepare for the changes. 

  
  

Important considerations:

• Legitimate exceptions:

  While seasonal spikes in demand are likely to be recognised as exceptions to the guaranteed hours obligation, further clarity on specific exemptions will be needed as the implementation date approaches. 

• Agency workers:

  The UK government has also committed to extending these measures to agency workers.