So the consultation has landed, and zero hours contracts are about to look very different. The Government's *Make Work Pay* consultation on "ending one-sided flexibility" sets out how the zero and low hours reforms in the Employment Rights Act 2025 will actually work. The rules are expected to hit in 2027, but if you employ casual workers I'd start preparing for it now.
 
But first, let me put your mind at rest on one thing first, because the headlines have been doing their usual job of frightening everyone: Zero hours contracts are not being banned.  In essence, workers who regularly work a settled pattern could gain the right to be offered guaranteed hours that reflect what they have actually been working; they will be entitled to reasonable notice of shifts, and to a payment when a shift is cancelled or cut at short notice. And, the duty applies to agency workers too (closes that loophole!).
 
These reforms could change your pay bill. Where you've got casuals who are working a predictable pattern week in week out, their hours stop being something you can flex when it suits and become a baseline cost you're committed to; flexibility now carries a price tag. Those notice requirements and cancellation payments are, in effect, a flex premium. A late rota change used to be free - soon it'll be a visible cost – which means your schedulers and line managers will need clear guidelines on how to handle this, and the management information to go with them.
 
There's a knock-on for salaries too. Once you fold in cancellation payments and guaranteed hours, the effective earnings of a casual role can look quite different from its headline rate. Model your costs on the nominal rate alone and you're making decisions on a number that isn't telling you the truth. And as casuals move onto more stable part-time contracts, the differences in pay, premia and benefits between your "core" and your "flex" people start to look harder to justify. This is an equal-value issue, and those don't tend to stay quiet once contracts formalise.
 
So what would I do?

1.   Map where you use zero and low hours contracts, and be honest about who's really working regular patterns.

2.   Model what guaranteed hours and cancellation payments do to your costs.

3.   Take a proper look at your internal equity before someone else does it for you.

4.   Check your pay policies and salary guidelines still make sense once contracts firm up.

5.   Ensure you have an opt out audit trail for those who chose not to accept your offer.
 
Here's a thought I'll leave you with, because I don't think all employers/sectors have the same experience with zero hours staff.

·       Some staff genuinely chose to work zero hours contracts and we need to make sure they don’t feel bullied into taking something they don’t want;

·       And, conversely, we cannot be seen to be “encouraging” staff to opt out of the guaranteed hours contracts.

The detail is still being consulted on, which is precisely why now is the moment to get ahead of it. If you'd like a hand working out what these reforms mean for you – or just someone to model the numbers so you're not doing it on the back of an envelope – give me a call on 07415 974004 or drop me a line at janeb@rewardrisk.co.uk. It's always easier to plan for a change than to scramble when it arrives.