Employment Rights Act

The Government has launched the next phase of consultation on the Employment Rights Act 2025, focusing on proposals to tackle what it describes as “one-sided flexibility” in the workplace. The consultation centres on reforms to zero hours and low hours contracts, alongside measures designed to provide workers with greater certainty over their working patterns.

The proposals would introduce new rights for qualifying workers, including:
• Access to guaranteed hours contracts that reflect the hours regularly worked during a defined reference period.
• Reasonable notice of shifts and any changes to scheduled work.
• Compensation for shifts that are cancelled, moved or shortened at short notice.

Importantly, the Government is not proposing an outright ban on zero hours contracts. Instead, it is seeking to balance flexibility for employers and workers with greater security and predictability for those whose hours and income can vary significantly from week to week. The consultation is also exploring how these measures should apply to workers on low hours contracts and agency workers.

Many of the practical details have yet to be decided, including eligibility thresholds, reference periods for calculating guaranteed hours and what constitutes adequate notice for shift changes. The outcome of this consultation will shape the regulations that underpin these reforms, which are expected to come into force in 2027.

As these reforms could have significant implications for workforce planning, staffing flexibility, labour costs and employee relations, the Chamber is keen to hear from members about how these proposals could affect their businesses.

We encourage members to share their views, experiences and concerns so that we can feed local business perspectives into the wider policy discussions with our committees and through the British Chambers of Commerce and other engagement opportunities.