A quiet revolution is underway in UK employment law. Hidden behind the broader headlines about workplace rights and minimum wage reform lies a fundamental shift that could redefine the legal relationship between employers and hundreds of thousands of flexible workers.
The proposed guaranteed hours offer (GHO) is a centrepiece of the Employment Rights Bill, and signals a marked departure from the permissive regime that has long governed zero-hours and low-hours contracts. Though not an outright ban, it’s a legislative attempt to rebalance flexibility in favour of those whose hours may be unpredictable, but whose working patterns are anything but occasional.
For employers, the practical implications will be significant and far-reaching.
From flexibility to fairness
At the heart of this reform lies a simple tension. Zero-hours and low-hours contracts have offered flexibility for employers managing fluctuating demand. But too often, this flexibility has been one-sided. Workers may be on call, week in and week out, with no guaranteed income, few meaningful protections, and crucially, no contractual reflection of the hours they regularly work.
Government research suggests that nearly three-quarters of a million people in the UK have been on zero-hours contracts for over a year. Many of those individuals, particularly in sectors like hospitality, retail, health and logistics, work regular hours for the same employer without any guarantee of future work. The reform seeks to fix that imbalance without removing genuine flexibility for those who want or need it.
What’s actually changing?
While the final detail awaits secondary legislation, the Bill introduces three central obligations for employers using variable hours contracts:
1. The right to a guaranteed hours offer
Workers with a consistent working pattern over a reference period (likely to be set at 12 weeks) will be entitled to receive a formal offer of a contract that reflects their actual average hours. Importantly, this duty to offer falls on the employer: the worker doesn’t have to request it.
The right applies not only to zero-hours workers but also to those on low-hours contracts. Although the specific definition of “low hours” is still under consultation, a working threshold of around 16 hours per week has been floated.
The offer must be on no less favourable terms than the current working arrangement and must reflect the hours, and potentially the days or times, that the worker typically works. That said, workers are free to decline the offer if they prefer to retain flexibility.
There are going to be exceptions to the duty to make an offer but thee final details surrounding these exceptions are yet to be finalised.
2. Notice for shifts, and compensation for cancellation
The Bill introduces minimum notice periods for shifts and rosters. If an employer cancels a shift, shortens it, or otherwise makes last-minute changes, the worker will be entitled to compensation. These measures aim to curb the current practice of withdrawing work at short notice with no financial consequence to the employer.
The details (e.g., how much notice is “reasonable,” and what compensation must be paid) will follow in later regulations. But the general direction is clear: unpredictability will come at a cost.
3. Application to agency arrangements
These reforms will apply not only to direct employees, but also to qualifying agency workers. The obligation to offer guaranteed hours may fall on the agency, the end-user client, or both, depending on who determines the hours and working conditions. This aspect may well create fresh complexities for staffing models.
What employers need to do now
While the new rights will not come into force until secondary legislation is laid, but with a specific date up in the air at present, employers would be wise to begin preparations now.
The reforms are not simply a matter of drafting new contracts. They will require internal systems, policies and practices to shift, particularly for organisations heavily reliant on flexible or contingent labour.
1. Audit your workforce
The first step is to identify which parts of the workforce might fall within scope. That includes:
- Workers on zero-hours or nominal-hours contracts who, in practice, work regular shifts;
- Individuals engaged through third parties or agencies;
- Staff whose working hours consistently exceed their contractual expectations.
A thorough audit over the next few months can help employers determine the likely volume of guaranteed hours offers they will be required to make once the law takes effect.
2. Track and report hours worked
The new framework hinges on actual hours worked over a defined reference period. That means employers must be able to track and report those hours reliably. For some businesses, that will require investment in timekeeping systems or payroll upgrades.
The reference period (expected to be 12 weeks) will need to be monitored on a rolling basis. Employers will have to identify when a threshold is reached and trigger the obligation to issue an offer within a specified time.
3. Develop a compliant offer process
Employers will need a formalised process for drafting and issuing guaranteed hours offers. These will need to:
- Reflect average hours worked;
- Align, where possible, with the pattern of days/times already being worked;
- Be consistent with any collective or union arrangements in place.
Template documents, workflows and training for line managers will all play a role in ensuring that offers are made lawfully and that any refusal by a worker is appropriately documented.
4. Revisit contracts and policies
Contracts for variable-hours workers may need to be re-drafted to accommodate the new GHO regime, as well as shift notice and cancellation provisions.
Employers should also review staff handbooks, scheduling policies and shift management protocols. Where rota changes are common or shifts are often cut short, new practices may be required to comply with notice and compensation rules once they are in force.
Practical challenges
This reform will not be universally welcomed by business. For sectors where labour demand is seasonal or volatile, the ability to flex staffing levels has been crucial. Requiring guaranteed hours for staff who have historically worked on-call may challenge longstanding business models and inflate payroll costs.
There is also the risk that a guaranteed hours contract could tip the balance of the employment relationship in other ways. A worker with mutual obligations for work and pay may begin to acquire wider employment protections, triggering obligations around redundancy, unfair dismissal, and other areas.
Nor will these changes be simple for businesses relying on agency labour. Where liability sits, and how guaranteed hours apply across split responsibilities, remains an area where further guidance is needed.
That said, these reforms are not a ban. There remains room for flexibility, especially for those who actively choose variable working arrangements. Employers who invest now in understanding their workforce patterns, engaging with unions or staff representatives, and putting systems in place to track and manage hours, will be best placed to comply.
Readiness as risk management
The Employment Rights Bill presents a measured but meaningful recalibration of working practices in the UK. It is not designed to punish flexibility, but to ensure that it is fairly balanced.
For employers, this is as much an exercise in risk management as in compliance. Missed offers, poorly-documented refusals, or short-notice shift changes that aren’t compensated will create legal exposure, administrative burdens, and potentially reputational damage.
At Buckles, we’re working closely with employers across all sectors to prepare for these changes – developing practical solutions that align business strategy with legal compliance. If your organisation would benefit from an early audit or strategic workshop, please don’t hesitate to get in touch.
