What is changing under the Employment Rights Act 2025?
The ERA 2025 introduces new obligations for businesses that use zero hours or low-hours contracts. These changes are being phased in, with some already in force and others expected over the next year or two.
Guaranteed hours offers
Employers will be required to offer workers a contract reflecting their regular hours once they have worked a consistent pattern over a reference period. If someone has effectively been working 20 hours a week for an extended period, you may be required to offer a contract that reflects that, rather than keeping them on zero hours indefinitely.
The reference period is still being confirmed through government consultation, but current indications suggest it will be around 12 weeks. Once the obligation is triggered, you must make a written offer within a specified timeframe. The worker can choose to decline it and remain on zero hours, but if they accept, you cannot simply revert them without proper process.
Start reviewing your workforce now. If you have people who have been on zero hours for months or years with a consistent schedule, you may already be approaching the point where an offer will be required once these provisions come fully into force.
Reasonable notice of shifts
Businesses will be required to give workers reasonable advance notice of their shifts, including the date, start time, end time, and number of hours. Cancelling or changing shifts at short notice will also trigger a payment obligation to compensate the worker for the disruption.
In practice, this means a worker who arrives for a shift and is sent home early, or whose shift is cancelled the morning it was due to start, will be entitled to a payment reflecting the notice they were given. Organisations that currently operate informally — texting staff the night before or calling the morning of — will need to change how they schedule work.
Day-one sick pay
As noted above, SSP is now available from day one regardless of earnings. Review your sickness absence policy to make sure it reflects this.
What should your zero hours contract include?
A common mistake is using a vague or outdated zero hours contract, sometimes just a letter or email, rather than a properly drafted document. If your contract doesn’t clearly set out the arrangement, you lose the ability to rely on it when things go wrong.
A compliant zero hours contract should cover:
- A clear statement that the employer is not obliged to offer work, and the worker is not obliged to accept it
- Confirmation that exclusivity clauses are not included and the worker is free to work for other employers
- How and when hours will be offered, and how much notice will be given
- Pay arrangements, including how holiday pay is calculated
- What happens when shifts are cancelled at short notice, in line with the new ERA 2025 obligations
- The worker’s right to request a more stable contract after 26 weeks of regular work
Getting this right before the new provisions come fully into force puts you in a much stronger position. An out-of-date contract is a liability, even where the working relationship itself is straightforward.
No3A is a neighbourhood bar and eatery in Bromsgrove with a strong community following and a small, dedicated team. Like many hospitality businesses, they relied on zero hours contracts for the flexibility the sector demands.
When they came to us, their existing contract had some room for improvements. It hadn’t been reviewed recently, and a lack of clarity was creating more questions from staff than it answered. Using Worcestershire County Council funding, we worked with them to draft a clear, compliant zero hours contract that laid out the arrangement honestly and fairly. We also created a culture book to give the team a clearer sense of identity and what working at No3A really means.
The client said “The consultancy service received has helped our business to get organised and given us the confidence to proceed forward into the more complicated landscape of being a small employer If we hadn’t had the support we would have been struggling to cope with the increased demands placed upon us going forward.”
The combination of a legally sound contract and clear culture documentation gave their team more confidence and the business better protection.
What you should do now
- Review your current zero hours contracts against the latest ACAS guidance and legal requirements
- Update your sickness absence policy to reflect day-one SSP entitlement
- Think about how you give notice of shifts and whether your current practice would withstand scrutiny
- Keep records of hours worked so you can assess whether any workers have established a regular pattern that triggers the guaranteed hours obligation
- Take advice if you are unsure whether your arrangements are compliant
Zero hours contracts can still work for your business. But the days of treating them as a way to avoid worker obligations are over. The rules have tightened, and the consequences of getting it wrong are real.
If you’d like a review of your current contracts and employment arrangements, get in touch with the team today.
Book a free 30-minute discovery call
Or explore our retained HR support packages to see how we can work with you on an ongoing basis.
About the author
Laura Weston MCIPD, Senior HR Consultant at Limelite HR & Learning. Laura specialises in employment law, HR compliance, change management and policy support, helping organisations across Worcestershire and the UK navigate complex people challenges with confidence. Connect with Laura on LinkedIn.
