The changing law for zero and low hour workers
The Employment Rights Act 2025 introduces new significant statutory rights for workers on zero and low-hours contracts, including reasonable notice of shifts, the right to guaranteed hours and payments for short-notice cancellation of shifts, with corresponding rights for agency workers. This article details the upcoming changes and their likely impact on the recruitment sector.
Guaranteed hours
The new rules (which are expected in 2027) will mean that all workers employed on zero-hours and low hours contracts will have a right to be offered a contract that reflects the hours they have actually worked over a set reference period. It is still unclear what will qualify as a worker on ‘low hours’. The detail, including how the reference period will be calculated and qualifying criteria will also be set out in regulations that are still awaited.
Crucially, this right will apply to agency workers and although it will be the responsibility of the end hirer to make any guaranteed hours offer, the key point to note for recruiters is that regulations do envisage placing obligations on the agency in some scenarios.
Again the detail of what this will look like is missing but this may well cause significant administrative work and cost for recruitment agencies so it will be important to make the preparations early when that detail becomes clear.
Many recruitment business are keen to see whether such rules will apply to seasonal or temporary workers and how this will be navigated for those workers if so.
Reasonable notice of shifts
Workers on zero hours or low hours contracts must receive reasonable notice of shifts (including the time, day and how many hours are to be worked) and any change to or cancellation of a shift will be entitled to proportionate compensation for cancelled shifts. This will also apply to agency workers and have a large impact on the recruitment sector.
What is ‘reasonable’ notice will depend on the specific circumstances, but we expect that regulations will set out a minimum notice period. Cancelled shifts include a number of different scenarios including when a shift is offered to more people than are needed, and then the worker is ultimately not required because someone else has agreed to cover it. However, a worker will only have entitlement to payment for a short notice cancellation if they reasonably believed they would be needed for that shift. This provision potentially helps to clarify the scope of these rules when shifts are offered to a large number of workers.
Nevertheless, we expect this to have a profound impact on those who engage workers and agencies in the recruitment sector.
In the specific case of agency workers, it will be the responsibility of both the employment agency and the end hirer to meet these obligations with compensation initially paid by the agency but are expected to be recoupable from the end hirer. If arrangements between the agency and hirer are not already in place, there are regulations expected which will deal with how this will work in practice.
How you can prepare
These changes are expected to be introduced by 2027 to allow for appropriate time to plan and prepare. Whilst the detail of these regulations is still subject to consultation, the recruitment sector is specifically impacted by these upcoming changes and should prepare accordingly. Detailed government guidance is expected.
Where your recruitment business deals with workers on zero hour or low hours contracts, we would suggest that you should review your arrangements to assess which workers may be entitled to a regular hours contract when the law changes.
Where shifts for your workers are regularly offered at short notice and/or cancelled or curtailed, you should assess how you can avoid short notice shift offers and changes to reduce the exposure to compensation when the changes come into force. Those without existing arrangements in place with need to act quickly when the details are released as to how sums for cancelled or rearranged shifts can be recouped from the end hirer.
For more information about this issue, please contact:
Stephen Mutch
Director - Employment and HR
T: +44 (0) 770 356 8831 stephen.mutch @pannonecorporate.com
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