CIPD warns on zero-hours reforms

The CIPD has warned that proposed zero-hours contract reforms could push employers towards other forms of flexible labour if the final regulations prove too complex to manage.

The professional body for HR and people development said well-managed zero-hours contracts can provide useful flexibility for employers and for people who cannot commit to fixed hours, including students, carers, and those managing health conditions.

Its response focuses on the Government’s consultation on new rights for zero-hours contract workers, including the reference period used to determine guaranteed minimum hours and the requirement to give reasonable advance notice of shifts. The reforms sit within a wider programme of employment law changes under the Employment Rights Act 2025.

Ben Willmott, head of public policy at the CIPD, said: “Well-managed zero-hours contracts provide welcome flexibility for employers and people who want to work but cannot commit to fixed hours – including students, carers and those managing health conditions.

“It’s really important that there’s meaningful consultation on these new rights, including the reference period which will be used to decide the number of guaranteed minimum hours a zero-hours contract worker will be entitled to. A longer reference period will be easier for employers to manage, but even with this, the new measures are likely to be extremely complex and challenging to comply with, particularly for small firms or those with fluctuations in demand.

“However, this is only one headache for employers – the challenge of providing reasonable advanced notice of shifts is also likely to prove difficult and require caveats to allow for issues like sickness absence.”

The design of the reference period will determine how predictable the system is for employers and workers. A shorter period may give workers quicker access to guaranteed hours based on recent patterns, while a longer period may give businesses more scope to account for seasonal demand, absence, and uneven trading conditions.

Those details are likely to be particularly important in hospitality, retail, leisure, care, events, and other labour-intensive sectors where staffing levels can change quickly. Smaller employers may also face greater difficulty administering shift notices, guaranteed-hours calculations, and compliance records without dedicated HR systems.

Willmott said: “If the final regulations are too difficult to manage, employers will simply find other ways to achieve workforce flexibility. They are likely to rely more on self-employed contractors and fixed term contracts, for example, potentially resulting in more rather than less insecure employment.

“This would also damage opportunities for young people who particularly benefit from zero-hours contract arrangements because they enable them to balance work while studying.”

The CIPD’s position reflects a policy trade-off between limiting one-sided flexibility and preserving working arrangements that some employees actively choose. If employers move away from zero-hours contracts in response to administrative complexity, the result may be greater use of labour models that offer less continuity or fewer routes into work for some groups.

The final shape of the rules will depend on consultation and secondary detail, including how reasonable notice is defined, how cancellations are treated, and what exceptions apply when demand changes suddenly. Employers are likely to examine those provisions closely before deciding how future workforce models should be structured.