For many businesses, workforce flexibility is essential. Seasonal demand, project-based work, fluctuating customer requirements and operational pressures often mean employers rely on variable working arrangements to meet business needs. Zero-hours contracts, casual worker agreements and flexible shift patterns have become common across sectors such as warehousing, logistics, construction, security, hospitality and retail.
However, the Employment Rights Act 2025 introduces significant changes that could affect how employers engage and manage workers with irregular hours. One of the most important reforms is the introduction of new rights relating to guaranteed hours contracts.
For employers, these changes could have implications for workforce planning, labour costs, scheduling and compliance. In this guide, we explain what is changing, why the reforms are being introduced and what employers should do now to prepare.
The proposed reforms aim to provide greater predictability and security for workers whose hours fluctuate significantly. Under the new framework, eligible workers may have the right to be offered a contract that reflects the hours they regularly work over a specified reference period. The intention is to prevent situations where workers consistently work regular hours while remaining on contracts that do not accurately reflect their actual working patterns. The Government believes this will provide greater certainty for workers while encouraging fair and transparent workforce practices.
The Employment Rights Act 2025 forms part of the Government's wider programme to strengthen workplace protections and improve job security. Ministers have expressed concerns that some workers experience uncertainty regarding earnings, working patterns and future employment opportunities. The guaranteed hours proposals are intended to provide more predictable income and working arrangements for individuals who regularly work beyond the minimum hours stated in their contracts. The reforms are also designed to improve transparency and ensure contractual arrangements better reflect actual working practices.
The reforms are expected to require employers to assess working patterns over a defined reference period and, where applicable, offer contracts that more accurately reflect the hours regularly worked.
While the detailed regulations are still being developed, employers may need to:
Review workforce scheduling practices
Monitor average hours worked
Assess contractual arrangements
Update employment policies
Review workforce planning processes
Improve workforce record keeping
For organisations relying heavily on flexible labour models, these changes may require additional planning and administration.
Distribution centres, fulfilment operations and logistics businesses often experience fluctuating demand throughout the year. Employers may need to review whether workers consistently exceed contracted hours and assess the implications of guaranteed hours requirements.
Construction projects often involve changing labour demands throughout different project phases. Businesses may need to consider how flexible labour arrangements align with future contractual obligations.
Security operations frequently rely on flexible deployment models, event-based staffing and temporary assignments. Employers should review workforce utilisation patterns and contractual arrangements ahead of implementation.
Hotels, restaurants and leisure venues often experience seasonal demand fluctuations. The new rules could affect how businesses manage casual and flexible workers during peak periods.
Retail employers may need to assess workforce scheduling practices, particularly where employees consistently work regular hours above contractual commitments.
One concern raised by employers is whether guaranteed hours contracts will reduce workforce flexibility. The Government has indicated that businesses will still be able to respond to genuine operational needs. However, employers may need to justify workforce arrangements more carefully and ensure contracts accurately reflect reality. For many organisations, the focus will shift towards better workforce planning rather than reduced flexibility. Businesses that understand their staffing requirements and maintain clear records are likely to adapt more effectively.
Accurate workforce records are likely to become increasingly important under the new framework.
Employers should be able to demonstrate:
Hours worked
Shift patterns
Contracted hours
Overtime arrangements
Scheduling practices
Good workforce data not only supports compliance but also helps employers make more informed operational decisions.
Although implementation details continue to develop, employers should start reviewing workforce arrangements now.
Practical steps may include:
Auditing flexible worker contracts
Reviewing scheduling processes
Assessing average hours worked
Updating workforce policies
Strengthening management training
Improving workforce record keeping
Early preparation can help organisations understand potential impacts and avoid last-minute compliance challenges.
The guaranteed hours reforms are likely to increase the importance of workforce planning, people management and employment law awareness.
Circle Academy helps organisations prepare through:
Employment Law Fundamentals Training
Leadership and Management Courses
Workplace Compliance Training
HR and Manager Development Programmes
Workforce Planning Training
Change Management and Leadership Development
With more than 180 accredited courses available online and in person, we help employers build compliant, capable and confident management teams.
This article is based on guidance and implementation plans published by the UK Government and ACAS.
UK Government – Employment Rights Act Implementation Timeline
UK Government – Employment Rights Act Factsheets
https://www.gov.uk/government/publications/employment-rights-bill-factsheets
ACAS – Contracts and Working Arrangements Guidance
The information in this article is intended as general guidance for employers and managers. It should not be relied upon as legal advice. Employment law is subject to change, and the application of legislation may vary depending on individual circumstances.
If you are unsure how the Employment Rights Act 2025 may affect your organisation, we recommend seeking appropriate legal or professional advice.
The Employment Rights Act 2025 could significantly change how employers manage flexible workforces and workforce planning.