Employment Rights Bill | Casual and Seasonal Staff – What will the Proposals Mean for Employers?

There has been much debate in the past on the use of zero-hour contracts, with many believing that they exploit low-income workers by denying them a stable income and job security.

In 2015, the Conservative government banned exclusivity clauses in zero-hours contracts. Now, the Labour government is seeking to go further through the proposed Employment Rights Bill, aiming to end one-sided flexibility in the labour market. While the core principles are clear, much of the detail will be set out in future regulations, leaving areas of uncertainty for now. Below, we summarise the current position and its likely impact on employers.

Casual Workers Rights

The Employment Rights Bill introduces a range of new protections for casual workers, especially those on zero or low-hour contracts. Rather than banning these arrangements, the bill aims to strike a fairer balance between flexibility and stability by placing new legal obligations on employers.

What rights will casual workers gain?

Casual workers who consistently work regular hours over a reference period (expected to be 12 weeks) must be offered a guaranteed hours contract that reflects their actual pattern of work. This ensures more predictable income and job security.

They will also gain:

• Advance notice of shifts and any changes,
• Compensation for cancelled or reduced shifts at short notice,
• Written information about these rights should be provided within two weeks of starting work,
• Protection from dismissal or detriment for exercising these rights.

What makes a worker “qualifying”?

A worker qualifies for these protections if they:

• Are on a zero or low hours contract during the reference period,
• Work a consistent number of hours, and
• (If on a low-hours contract) work more than the contract stipulates.

This is designed to stop employers from avoiding their obligations by issuing contracts with minimal hours. The exact definition of “low hours” will be key if the threshold is set too high, as it could bring a large number of workers into scope and restrict employers’ flexibility.

How does this differ from past rules?

Previous reforms, such as the 2015 exclusivity ban, offered limited protection. The new legislation establishes enforceable statutory rights that more accurately reflect the contributions of many casual workers, bringing them closer to the standard protections afforded to employees.

What does this mean in practice?

For workers, it means greater stability and a way to challenge unpredictable working patterns. For employers, particularly in sectors like hospitality or retail, it introduces new compliance obligations and administrative complexity. Those relying on casual labour will need to reassess workforce planning and contract structures.

So, what does the bill say?

Duty to offer guaranteed hours

The bill will introduce a duty on employers to offer a guaranteed hours contract that reflects the hours a qualifying worker regularly works over a reference period. Although the duration of the reference period has not yet been specified, it is suggested that it will be 12 weeks.

An employer will be required to make a guaranteed hours offer to a qualifying worker at the end of every reference period.

Provision of information

Employers will also be required to take reasonable steps to ensure that workers are provided with specified information regarding their rights to guaranteed hours within two weeks of the worker commencing employment or becoming a qualifying worker.

Qualifying worker explained

To meet the definition of ‘qualifying worker’, the individual will need to satisfy specific criteria, including:

• Working under a zero or low hours contract during the reference period.
• Working a certain number of hours regularly, and
• If working under a low-hours contract, the hours worked in the reference period exceed the minimum number of hours specified in the contract.

Extending the right to low-hours contracts is, in effect, an anti-avoidance measure to prevent employers from deliberately assigning workers to contracts of, say, one or two hours per week. How the regulations define a low number of hours will be crucial for employers. If too high, it could significantly restrict organisations’ ability to adjust staffing levels on short notice and will increase the administrative burden by bringing more workers into scope.

Reasonable notice of shifts and changes to shifts

An employer will have to give a zero or low hours worker reasonable notice of:

• A shift (specifying the date, the time and end time, and the number of hours to be worked) that the employer requires the worker to work, and
• Where a shift has been agreed, any changes to the shift time and hours.

Regulations will outline what will be presumed to be unreasonable notice, unless otherwise demonstrated.

Compensation for cancelled, moved or curtailed shifts

Workers will be entitled to compensation if their shift is cancelled, moved, or curtailed at short notice. What classes as short notice will be set out in regulations, but it will not exceed seven days. Regulations will also set out the amount of compensation to be paid and when.

Automatic unfair dismissal relating to guaranteed hours

It will be automatically unfair to dismiss an employee if:

• The reason (or principal reason) is that the employee accepted or rejected a guaranteed hours offer (or proposed to do so).
• The employer tried to avoid compliance with the duty to offer guaranteed hours; or
• The employer dismissed a worker because they are entitled to or believed they were entitled to a guaranteed hours offer.

It will also be automatically unfair to dismiss an employee as redundant for these reasons.

Right not to suffer a detriment

A worker will have the right not to be subjected to a detriment because:

• They accepted or rejected a guaranteed hours offer (or proposed to do so).
• Declined to work a shift on the basis that they believed the employer failed to comply with the duty to give reasonable notice of a shift or cancellation.
• Brought proceedings in good faith against the employer in relation to failures relating to the right to guaranteed hours, reasonable notice of shifts or payments for cancelled, moved or curtailed shifts, or
• They are subjected to a detriment by any act or failure to act by their employer on the ground that they are, or their employer believes that they are, entitled to a guaranteed hours offer.

What if an employer gets it wrong?

A worker will be able to bring an employment tribunal claim for automatic unfair dismissal or detriment, or if their employer fails to fulfil any of their duties relating to guaranteed hours contracts.

What will this mean for employers?

The new rules are likely to have a significant impact on any business that engages staff on zero or low hours contracts. Employers in sectors where seasonal fluctuations in staffing are commonplace, such as hospitality, will find the rules especially difficult to navigate.

Whilst the new suggested provisions do not go as far as banning zero hours contracts, they may have the effect of employers choosing to use them less.

The provisions may also incentivise employers to offer irregular work patterns, so that workers do not regularly work over the low hours threshold, and therefore do not qualify for a guaranteed hours offer.

Whilst the provisions are not set to come in force until 2026, we advise that employers identify any workers engaged on zero or low hours contracts at an early stage, so they are able to consider the impact of these provisions well in advance of them coming into force, and again once more of the detail is known later this year and early in 2026.

It would also be useful for employers to assess why certain individuals are engaged on a zero hours basis, as it may be that in many cases a fixed term contract, or even permanent employment, may be more appropriate.

If you would like to discuss the above, please contact a member of the employment team.