UK government pushes ahead with zero-hours reform for employers

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Ashutosh Sureka

02.06.2026

UK government pushes ahead with zero-hours reform for employers — UK zero-hours reform advances

Britain is moving forward with a new labour market reform that would require employers to offer contracts reflecting regular working patterns after an initial 12-week period. The proposal keeps pressure on sectors such as retail and hospitality, where businesses warn tighter rules on flexible work could raise costs and worsen youth unemployment.

Highlights

The UK government launched a consultation proposing that zero- and low-hours workers who regularly exceed contracted hours in their first 12 weeks be offered a 'baseline level of security and predictability'.
Business groups warn that a 12-week reference period for guaranteed-hours rights could reduce retail and hospitality sector flexibility, especially for seasonal hiring, and increase youth unemployment risks.
Enforcement concerns persist, as workers may face tribunals with delayed and limited compensation, and the proposed Fair Work Agency could only enforce short-notice shift change compensation.

Consultation sets out guaranteed-hours plan

As reported by Financial Times, the UK government said in a consultation published on Tuesday that its preferred approach is for workers to be offered a contract providing "a baseline level of security and predictability" if they consistently work more hours than their original contract provides during their first 12 weeks on the job.

The new right applies to workers on zero-hours or low-hours contracts, with ministers indicating that the threshold for low hours could be set between eight and 20 hours. The measure is one of the most disputed parts of Labour's wider workers' rights overhaul and is intended to deliver its pre-election pledge to ban what it calls exploitative zero-hour contracts.

Many operational details remain unresolved. The consultation, which closes in August after an earlier delay, still leaves open how guaranteed hours would be calculated, how seasonal work would be treated and what arrangements would apply after the initial 12-week reference period.

Paul Nowak, general secretary of the Trades Union Congress, says ministers should resist business "scaremongering" and move ahead with guaranteed-hours rights in full, with all workers eligible and cancelled shifts fully compensated.

Retail, hospitality and enforcement concerns grow

Business groups say the policy risks making hiring more difficult in low-wage sectors that often provide entry-level jobs for younger workers. Helen Dickinson, chief executive of the British Retail Consortium, says a 12-week assessment period is too short for retailers to manage seasonal demand, warning that staff recruited before Christmas could end up being entitled to the same hours after New Year when trading slows.

The consultation suggests employers could use limited-term contracts to meet temporary needs linked to seasonal fluctuations, such as fruit picking or conference work. But Dickinson says any reference period shorter than 26 weeks would leave retailers with little choice but to reduce the number of flexible roles during busier periods, while separate proposals on shift notice and compensation for late changes would be out of step with retail operations.

Neil Carberry, chief executive of the Recruitment & Employment Confederation, says getting the proposals wrong would be damaging for workers and could push unemployment higher, with youth unemployment a particular concern. Employment lawyers, however, say the bigger issue is whether such complex rules can be drafted in a way that is both workable and enforceable.

The consultation indicates the planned Fair Work Agency could enforce compensation rights for short-notice shift changes. But workers would still need to go to an employment tribunal to enforce any right to guaranteed hours, potentially facing long delays and limited compensation because proving financial loss may be difficult. Darren Newman, a consultant on employment law, says the reform risks becoming one of the most complicated rights in employment law while offering relatively limited practical value.

Our earlier coverage of Labour’s growth strategy examined mounting questions over whether the party’s pro-business messaging aligns with its governing instincts as it tries to revive a sluggish UK economy. We outlined how competing goals—such as regionally balanced, green and inclusive growth, alongside reluctance to broaden the tax base—could constrain policy choices and shape business confidence.

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