Employers using zero-hours, low-hours, agency, and variable-hours work models face a new compliance and workforce-planning test after the government launched a consultation on reforms designed to end one-sided flexibility in the labour market.
The Department for Business and Trade said the consultation will help shape measures giving qualifying workers a right to guaranteed hours, reasonable notice of shifts, and payments when shifts are cancelled, moved, or curtailed at short notice.
The consultation closes on 25 August 2026 and forms part of the government’s wider Make Work Pay agenda. Ministers have committed to curbing exploitative zero-hours arrangements while retaining flexibility for workers who actively want it.
More than 18 million people could benefit from the reforms, according to the government. It also cited Living Wage Foundation data showing that nearly six in ten workers with variable hours receive less than a week’s notice of their shifts.
The proposals are aimed at arrangements in which employers retain the ability to vary hours at short notice while workers bear the income and planning risk. Some workers would still be able to choose zero-hours contracts, but arrangements deemed exploitative would be banned.
Under the guaranteed-hours proposal, employers would have to offer qualifying workers guaranteed hours reflecting the number of hours worked over a reference period. The government is consulting on the length of that initial reference period, with a stated preference of 12 weeks. Qualifying workers would be able to reject an offer and remain on a zero-hours contract.
The reasonable-notice proposal would require employers to give eligible workers sufficient notice of shifts. Workers could bring tribunal claims where notice was unreasonable, with tribunals considering regulatory guidance on what should be presumed reasonable.
Payments would also become due where eligible workers have shifts cancelled, moved, or curtailed at short notice. That would alter the economics of last-minute rota changes, particularly in sectors where demand forecasting, seasonal peaks, sickness cover, and variable footfall currently drive staffing decisions.
Business Secretary Peter Kyle said: “It’s not right that people can work regular hours but still have no certainty about their pay from week to week. These vital changes will mean more certainty for millions of people and will save the lowest paid workers hundreds of pounds.”
He added: “Banning exploitative zero hours contracts is totemic because this government believes that people should be treated with dignity and respect at work.
“We’re consulting because we need to get the detail right to ensure these reforms work in practice and guard against unintended consequences from this major change to the labour market.”
Employment Rights Minister Kate Dearden said: “Ending uncertainty over hours and pay is one of the best ways we can boost living standards for millions of people and families across the country.
“These reforms put workers in the driving seat, giving those who want guaranteed hours the certainty they deserve, whilst protecting others who prefer the flexibility a zero hours contract offers.”
The reforms would land most heavily in sectors that rely on variable staffing, including hospitality, retail, logistics, care, leisure, events, and parts of warehousing. Many of those employers are already dealing with higher wage floors, National Insurance changes, recruitment gaps, sickness absence pressure, and weak consumer demand.
The operational effects would go beyond contract templates. Employers would need stronger demand forecasting, rota governance, payroll controls, line-manager training, and records capable of demonstrating how hours were calculated and why notice periods were reasonable. Short-notice cancellations could become a direct cost rather than an informal consequence borne by workers.
Workforce planning will become more data-dependent if the reforms proceed in their current direction. Companies accustomed to using flexible labour as a buffer against uncertain demand may need to invest in scheduling technology, clearer escalation processes, and more accurate records of actual hours worked across rolling periods.
Agency labour models may also need review. If responsibility for guaranteed hours, notice, and cancellation payments sits across agencies, end users, and workers, contractual clarity will become more important. Poorly designed arrangements could create disputes over who controls the rota and who carries the financial risk when shifts change.
The tribunal route adds another layer of exposure. If regulations leave too much room for interpretation, employers may face uncertainty until case law develops. Smaller companies may find the transition especially difficult if they lack dedicated HR support, reliable scheduling systems, or consistent manager training.
Employment regulation is moving towards greater predictability, stronger enforcement, and closer scrutiny of models that transfer volatility to workers. The consultation is designed to prevent unintended consequences, but it also signals that variable labour will no longer be treated as a low-friction management tool.
Employers that already offer predictable hours and fair notice may see less disruption. Those reliant on last-minute changes have until the end of the consultation to test workforce design, payroll exposure, and commercial assumptions before final rules are set.
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