Perhaps the most contentious and complex reform in the Employment Rights Act is the government’s efforts to end ‘exploitative zero-hours contracts’. Rob Moss examines ministers’ plans for ‘guaranteed hours’ and what still remains unknown

Despite calls to ban zero-hour contracts altogether, policymakers were persuaded that the flexibility they provided certain workers was of value, so they focused their attention instead on ending “one-sided flexibility”. The side they refer to is the employer’s.

Reforms would stop employers who might exploit workers by expecting them to turn up on a whim or change their shifts with little notice. They might roster 35 hours one week and 2 the next, creating the very definition of insecure work, with no guarantee of what a casual worker might earn one week versus the next.

So the Labour Party created the concept of “guaranteed hours”, a regime that would improve the security of earnings and make it harder for an employer to “exploit” its workforce.

Ministers also realised the problem was not unique to people on zero-hours contracts, but also applied to others working “low hours” with certain expectations to do more when requested.

When the Employment Rights Bill became an Act, despite a significant portion of the legislation being devoted to this new workers’ right to guaranteed hours, the detail was lacking. Employer bodies have been calling for clarification so they can prepare for the new measures when they come into force in 2027.

This month, the government published its consultation on the new measures, Ending one-sided flexibility: reforms of zero hours and similar contracts under its “Make Work Pay” banner. Responses need to be submitted by 25 August 2026.

Like any consultation document, it provides some answers to what ministers are planning, while also providing further ambiguity as to how the new measures will work.

Alongside guaranteed hours the consultation also addresses new workers’ rights to reasonable notice and to payment for “shifts cancelled, moved, or curtailed” at short notice. Personnel Today will look at these in a separate article.

Here, we look at what the guaranteed hours regulations could include, by summarising the consultation’s contents on these measures. We also look at some aspects of the new right that are not included in the consultation.

Right to guaranteed hours

The Employment Rights Act obliges employers to make a guaranteed hours offer to workers who regularly work but whose contract does not reflect the hours they regularly work. The new right will allow workers to enter into a guaranteed hours contract that reflects the hours they regularly work, if they want to.

A “guaranteed hours offer” will mean workers can enter into a new or varied worker’s contract. If a worker accepts the offer, their contract must set out the number of hours of work the worker would need to work and the employer would need to provide.

Eligibility for guaranteed hours

People on zero-hour contracts will be eligible for the new right, but we now have some indication of what “similar contracts” for “low hours” could be. It will depend on the consultation, which asks respondents for their preference, ranging from 8 to 48 hours in four-hour increments. But ministers have indicated that they want the threshold above which the right will not apply to land somewhere in the range of 8 to 20 hours per week.

Initial reference period

To qualify for a guaranteed hours offer, the government’s preference is a 12-week initial reference period, but the consultation also asks if 26 or 52 weeks would be preferred. This is the period over which the workers’ hours are tracked to establish whether they qualify for a guaranteed hours offer.

Subsequent reference periods

Most had assumed that the reference periods that follow the initial reference period would be the same length of time. However, the government has provided no preference on whether this would be 12, 26 or 52 weeks. Indeed, it has acknowledged that rolling 12-week reference periods could increase the administrative burden for employers.

It has also been suggested that there could be a gap between reference periods – potentially reducing the administrative burden further, as the employer would have a period of time when it would not need to keep track of the worker’s hours.

Subsequent reference periods cannot be used by the employer to reduce the hours already guaranteed in a worker’s contract. If both the worker and the employer wish to reduce the number of guaranteed hours, then they can do so through mutual agreement to vary the contract.

Regularity requirements

The Employment Rights Act says that the right to an offer of guaranteed hours applies where the worker works in excess of their guaranteed hours over the reference period. Those hours must, however, meet “such conditions as to number, regularity or otherwise” laid out in the regulations.

The government has not indicated a preference between the two options it provides in the consultation:

Option A: Weekly distribution only. The hours worked in the reference period would need to be distributed over a minimum number of weeks. For example, if the requirement were set at 8 weeks, then a worker who worked in 8 or more weeks of a 12-week initial reference period would qualify.

Option B: Weekly distribution and total hours. The worker must meet the weekly distribution requirement and exceed their contracted hours by a specified minimum total. For example, if the weekly distribution requirement is set at 8 weeks and the total hours requirement is set at 96 hours, then a worker who is already guaranteed 2 contracted hours per week would need to work at least 120 hours (24 contracted hours + 96 in excess) across a 12-week reference period and the worker would need to work in at least 8 weeks of the a 12-week reference period.

Regularity thresholds would be adjusted pro rata for longer subsequent reference periods. The consultation also asks whether the same rules should apply to agency workers.

Calculating guaranteed hours

The government has indicated that the guaranteed hours offer could be calculated either using the mean or the median, and is consulting on which would be best. For example, if a worker did 8 hours for 7 weeks and then 20 hours for 5 weeks, then the mean would be 13 hours per week and the median would be 8 hours.

This will affect the number of hours that must be guaranteed. A mean average produces higher offers where hours fluctuate, whereas a median favours employers with more variable demand.

Allocating hours and margin for adjustment

Once a guaranteed hours offer is required, ministers want to know whether the additional hours are packaged weekly, monthly or at the employer’s discretion. A weekly allocation would give workers more predictability, but a monthly approach would give employers more scope to vary shifts.

To avoid disagreements and potential liability for minor rounding errors, the consultation asks if there should be an adjustment margin to round the offer up or down to help align the guaranteed hours offer with shift rotas. Option A suggests a fixed figure (e.g. 2 hours), option B is a percentage (e.g. 10%), while option C suggests no adjustment margin.

Seasonal work and ‘temporary need’

Employers can use fixed-term contracts to manage periods of increased demand – for example, due to seasonal fluctuations. The ERA refers to these as “limited-term contracts” (LTCs).

If the LTC is shorter than the reference period, then the employer is not obliged to make a guaranteed hours offer – provided it was “reasonable” for the contract to be limited. For example, where the worker is only needed for 8 weeks to perform a specific task or for a particular event, and the contract terminates after completion.

The consultation also asks whether an employer can avoid offering guaranteed hours where there is a genuine short-term “temporary need”, other than for a specific task or event. In this situation, a contract could expire when it is reasonable for the employer to consider that the temporary need will be over.

If the definition of temporary need is too narrow, the fear is that employers may have to make guaranteed hours offers to workers engaged for genuinely short-term seasonal peaks.

Agency workers

Throughout the consultation, the government examines how the regulations apply to directly engaged workers and to agency workers. Much of the content is identical or broadly the same.

For agency workers, the consultation gathers opinions on whether it is the agency or the hirer using the agency that should bear the duty to offer guaranteed hours of work, and the impact of the three-way relationship.

For example, when assessing the regularity of work, this will apply to the hours worked by a particular hirer, rather than across all engagements managed by the agency.

Unanswered questions

The government’s consultation has drawn criticism from some employment lawyers for what has been omitted.

Darren Newman, speaking on the Personnel Today HR Podcast, explained that one of the things not really dealt with in the Employment Rights Act, and which the consultation document doesn’t really have any suggestions for, is how you deal with seasonal work.

“So if you’ve got someone on a relatively low number of guaranteed hours, but not so that you’d have them on a fixed-term contract,” he explains.

“They’re employed throughout the year, but their work fluctuates. It’s very difficult to see how you cope with big seasonal fluctuations… how you then reflect that in an offer that can guarantee some sort of regular pattern. It’s very difficult to envisage what the final right is actually going to look like.”

He also questions the lack of detail in how guaranteed hours will be scheduled for the worker.

“What’s not clear is how that’s going to be distributed over, say, a week or a month, because the offer’s going to have to say when I can offer you these hours,” he says.

“And the government isn’t consulting on how it makes sure that the offer that is made reflects the working pattern of the worker. If the workers work nearly all of their hours on a Thursday, what’s to stop the employer making a guaranteed hours offer with all the work being available on Saturday and Sunday? That needs to be dealt with in the regulations, but isn’t the subject of the consultation.”

Remedy

But Newman’s greatest criticism is around remedy. If an employer fails to make a guaranteed hour offer, what happens?

“You’re creating the single most complicated right in the whole of employment law, and it’s also one of the lowest-value rights. How is an employee, who hasn’t been given a guaranteed hours offer that correctly reflects what they should have got, supposed to enforce that right?” he asks.

“They’ve got to go to an employment tribunal, take the tribunal through the 17 pages of legislation and the goodness knows how many pages of regulations. And what do they get at the end of that? They get compensation that reflects their financial loss.

“But what have they financially lost? Because what they’ve lost is the guaranteed hours that would reflect the hours they’re already working. Well, if they’re already working those hours, they’re not losing anything by not being guaranteed them.”

 

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