Government Presses Ahead with Zero-Hours Contract Reforms Despite Hospitality Concerns

The Government has taken the next step towards reforming zero-hours contracts, launching a consultation on measures designed to provide workers with greater certainty over their hours and earnings. However, hospitality leaders have warned that the proposals must recognise the sector’s unique operational challenges and reliance on flexible working arrangements.

The consultation forms part of the Government’s wider employment rights agenda and aims to address what ministers describe as “exploitative” working practices. More than 18 million workers are expected to be affected by the proposed reforms, which are intended to improve income security and predictability for employees with variable working hours.

According to the Living Wage Foundation, nearly six in ten workers on variable-hour contracts currently receive less than one week’s notice of their shifts. The Government argues that this lack of certainty can make it difficult for workers to manage household budgets, arrange childcare, and plan their personal lives.

Under the proposals, eligible workers would be offered contracts reflecting their regular working patterns, while retaining the option for individuals who prefer the flexibility of zero-hours arrangements to continue working under such agreements. Employees would also gain rights to reasonable notice of shifts and compensation where shifts are cancelled, shortened, or changed at short notice.

The consultation, which runs until the end of August, seeks views from employers, workers and industry organisations on key details, including the threshold for guaranteed hours and the reference period used to assess regular working patterns.

Business Secretary Peter Kyle said the reforms would provide greater certainty for workers while helping to tackle insecure employment practices.

“It’s not right that people can work regular hours but still have no certainty about their pay from week to week,” he said. “These changes will mean more certainty for millions of people and help protect the lowest-paid workers from the costs associated with insecure work.”

Employment Rights Minister Kate Dearden added that improving job security could help raise living standards while also benefiting businesses through improved staff retention, skills development and productivity.

For the hospitality sector, however, the consultation raises important questions about how new rules will operate in businesses where demand can fluctuate significantly from week to week.

Responding to the announcement, UKHospitality Chair Kate Nicholls emphasised the importance of maintaining genuine flexibility for both employers and employees.

“Jobs in hospitality are critical for supporting people who need flexible hours and jobs, from working parents to those with caring responsibilities,” she said.

“Retaining access to zero-hours contracts was crucial and it was important the Government recognised that in the Employment Rights Act.”
Nicholls stressed that while the sector supports efforts to eliminate exploitative employment practices, the details of the reforms will be critical.

She argued that the proposed 12-week reference period for calculating guaranteed hours may not adequately reflect hospitality working patterns and suggested a 26-week period would provide a more accurate representation of employee hours while accommodating the industry’s seasonal nature.

UKHospitality has also called for flexibility within the proposed shift notice and cancellation rules, highlighting the unpredictable factors that regularly impact trading conditions.
“Hot weather or a major sporting event, for example, can fundamentally change how a business runs on any particular day,” Nicholls said.

The organisation warned that overly restrictive regulations could inadvertently reduce employment opportunities and undermine the flexibility valued by many hospitality workers.
“There is a danger that over-regulating flexible work actually increases work instability, rather than decreasing it, which would undermine the Government’s agenda to get people back into work,” she added.

The consultation is expected to be closely watched across the hospitality and licensed on-trade sectors, where flexible staffing arrangements play a significant role in managing seasonal demand, major events and changing consumer patterns. Industry leaders are urging the Government to ensure the final legislation strikes a workable balance between improving worker protections and preserving the operational flexibility many hospitality businesses depend upon.