Zero hours contracts are widely used across the hospitality industry, particularly in restaurants, hotels, pubs, and coffee shops, where demand fluctuates due to seasonality, special events, and unpredictable footfall.

While these contracts can offer flexibility for both employers and workers, concerns have been raised about one-sided flexibility, where workers bear the financial risk of inconsistent hours and last-minute shift cancellations.

The government has committed to addressing these issues by ensuring that all jobs provide a baseline of security and predictability. These changes aim to create a level playing field for businesses that already offer fair employment practices while improving financial stability and well-being for workers.

Employers who plan ahead and provide greater clarity on working patterns will be better positioned to attract and retain a reliable workforce while maintaining operational flexibility.

Understanding Zero Hours Contracts

A genuine zero hours contract allows an employer to offer work as and when it is available, with the worker having the right to accept or decline shifts.

This arrangement is particularly useful for hospitality businesses that require a pool of casual staff to cover unexpected absences, seasonal demand, or fluctuating workloads. Many workers appreciate the flexibility, using it to earn extra income when it suits them.

However, zero hours contracts should not be used to avoid providing guaranteed hours to employees who are effectively working regular, predictable schedules.

If a worker is consistently working 25 hours per week and is placed on a rota with the expectation that they will take those shifts, they are not truly on a zero hours contract.

This is the type of situation the government seeks to address, as it can create instability and insecurity for workers.

What Changes Might Be Expected?

Right to guaranteed hours

While the final details are yet to be confirmed and will depend on consultation, potential reforms could require employers to offer guaranteed hours contracts to workers who have consistently worked an average number of hours over a set period, likely 12 weeks.

Workers would still have the option to decline the offer and remain on a zero hours contract if they prefer.

The consultation will determine how employers should calculate the guaranteed hours and ensure that any offers align with actual working patterns.

Right to reasonable notice of shifts

Another possible change is the introduction of a right to reasonable notice of shifts.

Employers may need to provide a minimum notice period before scheduling shifts or making changes. If notice is deemed unreasonable, workers could have the right to bring a claim to an employment tribunal.

However, the definition of “reasonable notice” has not yet been established and will be determined through consultation.

Right to compensation

There is also discussion around introducing a right to compensation when shifts are cancelled, curtailed, or moved at short notice.

However, there is currently no definition of what constitutes short notice or what level of compensation would be required. These details will also be subject to consultation before any regulations are finalised.

When will the legislation on zero hours contracts come into force?

At this stage the guidance is some time in 2026. We’ll keep you posted.

How to Review Your Use of Zero Hours Contracts

With these changes on the horizon, it is beneficial for hospitality employers to review their use of zero hours contracts and ensure they are applied appropriately. Below is a checklist to help you assess your current practices and prepare for potential legislative updates.

Zero Hours Contract Compliance Checklist

1.  Do you have a genuine need for casual staff?

  • If your restaurant, hotel, pub, or coffee shop requires workers who can accept or decline shifts on a flexible basis, zero hours contracts may be appropriate.

2.  Are your zero hours contracts truly flexible?

  • Workers must have the right to refuse work without penalty.o You should not expect workers to be available at all times or schedule them as if they were on fixed contracts.

3.  Are you using zero hours contracts to avoid offering guaranteed hours?

  • If a worker has been working regular shifts over a long period, they may be entitled to a guaranteed hours contract under future legislation.

4.  Is your zero hours contract properly worded?

  • Ensure the contract includes a clear clause on mutual agreement, confirming that work is offered on an ad-hoc basis and can be declined by the worker.

5.  Do you apply rolled-up holiday pay?

  • Workers on zero hours contracts are legally allowed to have rolled up holiday pay. Instead of them taking holiday, you can add 12.07% to their pay identified as holiday pay. This can save time on administration.

6.  Are you being transparent with workers?

  • Clearly communicate contract terms and expectations to avoid misunderstandings.

7.  Would offering guaranteed minimum hours be a better approach?

  • Consider whether your workforce would benefit from contracts that offer a minimum number of guaranteed hours with the option to work additional shifts

Next Steps for Employers and BONUS GIFT!

Although no changes have been legally implemented yet, the likelihood of reform means that now is the time to assess your workforce arrangements.

Employers who continue to rely on zero hours contracts should ensure they are used appropriately and fairly. By reviewing your policies now, you can stay ahead of legislative changes and maintain a reputation as a fair and responsible employer.

And here’s your bonus gift! Download our Zero Hours Contract template and simply add your branding and make the relevant changes.

If you’d need guidance reviewing your contracts, please do get in touch and we’d be pleased to help.