Zero hours contracts: what the Employment Rights Act 2025 means for employers

Zero hours contracts have been a fixture of the UK labour market for decades — particularly in sectors like care, hospitality, retail, and the voluntary sector. The Employment Rights Act 2025 introduces significant new obligations for employers who use them. Here's what's changing and what you need to think about.

What's changing?

The Act introduces a right for zero hours workers to request a contract that reflects their regular working pattern — the hours they consistently work over a reference period. The detail of the reference period and the process for making and responding to these requests is being set out in secondary legislation, but the direction of travel is clear: workers who have a de facto regular pattern of work should, over time, have a contract that reflects it.

In addition, the Act introduces new requirements around shift notification and cancellation. Workers on zero hours contracts must be given reasonable notice of shifts, and employers who cancel or curtail shifts at short notice will be required to pay compensation. Again, the precise notice periods and compensation rates are subject to secondary legislation.

Who does this affect?

If your business uses zero hours contracts in any volume — whether for bank staff, casual cover, or a core part of your workforce — these changes are directly relevant. Sectors most likely to feel the impact include social care, hospitality, events, education, and charities with flexible staffing models.

What should employers do now?

Audit your zero hours workforce. Look at the people on zero hours contracts and honestly assess their actual working patterns. Are some of them consistently working regular hours? If so, they may already have a legitimate expectation of guaranteed hours, and the new legislation will give them a formal route to request a contract that reflects that.

Review your shift notification practices. If your current model involves last-minute rota changes or short-notice cancellations, start building better processes now. The compensation liability for late cancellation will focus minds — but the reputational and retention cost of unreliable scheduling is already real.

Consider whether zero hours contracts are the right tool. For some businesses, zero hours contracts genuinely reflect operational need and work well for workers who value flexibility. For others, they've become a default that doesn't reflect actual working patterns. The new legislation is a useful prompt to review whether your use of these contracts is appropriate, sustainable, and aligned with how you want to operate as an employer.

A note for care providers

The social care sector in particular uses zero hours contracts extensively, often for genuine operational reasons in a workforce that values flexibility. The new obligations will require careful management — particularly around shift notification in a sector where last-minute changes are sometimes unavoidable. Workforce planning and communication processes will need to be strong.

The bottom line

Zero hours contract reform is one of the more operationally complex changes in the Employment Rights Act 2025. The detail is still emerging, but the direction is clear: greater security and predictability for workers, and greater obligation for employers. Businesses that start reviewing their practices now will be better placed to adapt when the commencement date arrives.