Zero-hours contracts have long given employers flexibility when staffing needs change from week to week. For sectors such as hospitality, care, retail and seasonal businesses, that flexibility has been invaluable for both employers and workers.
However, the rules surrounding these zero-hours contracts are changing, with new employment law reforms designed to give workers greater security, predictability and protection against last-minute changes to their working schedules.
For employers, this means that now is the time to review how zero-hours and low-hours arrangements are being used within your business. Waiting until the new requirements are fully in force could leave you rushing to update contracts, rotas and internal HR processes at the last minute.
What Is Changing for Zero-Hours Contracts?
The Government’s employment law reforms are intended to tackle what it describes as exploitative use of zero-hours contracts while recognising that genuinely flexible working arrangements can still suit some businesses and employees.
One of the most significant proposed changes is the introduction of a right to guaranteed hours for qualifying workers. For example, where someone regularly works a particular number of hours over a certain period, their employer may be required to offer them a contract reflecting those hours. The detailed operation of the rules will depend on the legislation and supporting regulations, but the overall direction is towards contracts that better represent an individual’s established working pattern.
There are also changes aimed at improving the predictability of shifts. Employers will be expected to provide reasonable notice of shifts, as well as reasonable notice when a shift is changed or cancelled. Workers may also become entitled to compensation where shifts are cancelled, moved or shortened at short notice.
For businesses accustomed to adjusting rotas at very short notice, these requirements could represent a substantial change in day-to-day workforce management.
Does This Mean Zero-Hours Contracts Are Being Banned?
Not necessarily. Despite some of the dramatic headlines surrounding these reforms, the intention is not simply to remove every zero-hours arrangement – this would be impossible.
Flexible contracts can work very well wherever flexibility is genuinely required by both parties. For example, some employees may prefer the freedom to accept work around studies, childcare, another job or other commitments. The focus of the reforms is instead on preventing situations in which workers are effectively working regular hours while receiving none of the security that would normally come with those hours.
For employers, this is an important distinction. There is no need to panic and assume that every flexible contract must disappear; your business should assess whether the existing arrangements accurately reflect how people actually work.
What Should Employers Be Doing Now?
A sensible starting point would be to carry out an audit of your workforce. Look at your employees and workers on zero-hours or low-hours contracts and compare their written terms with the hours they have actually been working.
If someone is contracted for zero hours but has consistently worked 20 or 30 hours every week for a prolonged period, that arrangement needs to be looked at. You should also consider how frequently shifts are cancelled or altered and how much notice employees typically receive.
Contracts, policies and rota procedures should also be reviewed. Managers responsible for scheduling staff may need additional guidance, particularly if they are currently accustomed to making same-day or last-minute changes without considering the employment law implications.
Accurate record keeping will become increasingly important too. Employers need to be able to demonstrate working patterns, when shifts were offered, when changes were communicated and why particular contractual arrangements remain appropriate.
Planning Ahead Can Reduce the Risk
Employment law changes are much easier to manage when businesses prepare before the rules become an immediate compliance issue. Reviewing contracts early gives you ample time to identify potential problems, understand the financial impact and introduce more consistent planning of your workforce.
It is also worth looking beyond the contracts themselves. If your business relies heavily on zero-hours workers because staffing requirements are unpredictable, consider whether better forecasting, clearer rota deadlines or a mixture of permanent and flexible staff could provide the same operational flexibility with less risk.
The key is not to make rushed changes simply because zero-hours contracts will be under greater scrutiny. Instead, employers should make sure that contracts genuinely reflect working arrangements and that managers understand the responsibilities that come with offering, changing and cancelling shifts.
How LBJ Consultants Can Help
Keeping up with changes to UK employment law can be a headache, particularly when you are already trying to focus on running your business.
At LBJ Consultants, we can help you, as an employer, review your current HR arrangements, identify areas of risk and prepare for changes affecting zero-hours and flexible workers.
Taking action early can help you avoid unnecessary disruptions while also ensuring your business continues to benefit from workforce flexibility, where appropriate.
If you need help with your HR and are considering outsourcing it, get in touch with our friendly team at LBJ Consultants today on:
Phone: 01292 892 713 or 07984 568 523
Email: enquiries@lbjconsultants.co.uk
