Zero-Hours Contracts and the Employment Rights Bill: What's Changing for Small Employers

If you run a café, a salon, a shop or a small hospitality business, zero-hours and low-hours contracts probably feel like a practical way to match staff to demand. Quiet week? Fewer shifts. Busy bank holiday? More hands. But the ground is shifting. The Employment Rights Bill, introduced to Parliament in 2024, sets out some of the most significant proposed reforms to flexible working arrangements in a generation.

This article explains, in plain terms, what a zero-hours contract is, what the Bill proposes, and — importantly — what is settled law today versus what is still a proposal working its way through Parliament. It is written for small employers who do not have an in-house HR team and simply want to stay on the right side of the rules.

What is a zero-hours contract, and is it still legal?

A zero-hours contract is an arrangement where an employer is not obliged to provide any minimum number of working hours, and the individual is generally not obliged to accept any work offered. They remain lawful in the UK today, and for many small businesses they are a genuinely useful tool. Staff on these contracts are still entitled to core rights such as the National Minimum Wage or National Living Wage for hours actually worked, paid holiday that accrues with the hours they do, and rest breaks.

One long-standing rule worth remembering: exclusivity clauses in zero-hours contracts — terms that try to stop someone working for another employer — are already unenforceable in law. So a member of staff on a zero-hours contract with you is free to pick up shifts elsewhere. That has been the position for some years and is not changing.

What the Employment Rights Bill proposes is not a ban on zero-hours contracts. Instead, it aims to tackle what the Government describes as "one-sided flexibility" — situations where a worker is left uncertain about their income while the employer keeps all the flexibility.

What does the Employment Rights Bill actually propose?

At the heart of the Bill are a few connected ideas. It is important to stress that these are proposals. The Bill is still progressing through Parliament, and much of the fine detail is expected to be filled in later through separate regulations and consultation. You should always check the latest position before making firm decisions.

• An offer of guaranteed hours. The Bill proposes that workers on zero-hours or low-hours arrangements should be offered a contract that guarantees a number of hours reflecting the hours they have regularly worked over a defined reference period. In other words, if someone consistently works a certain pattern, they should be offered a contract that reflects that reality.
• Reasonable notice of shifts. The Bill proposes a right to reasonable notice of shifts, including when they are scheduled, moved or cancelled.
• Payment for short-notice changes. Linked to the above, there are proposals for workers to receive a payment where shifts are cancelled, curtailed or moved at short notice — compensating people for lost, expected income.

The exact thresholds — how many hours count as "low hours", how long the reference period is, what counts as "reasonable" notice, and how any short-notice payment is calculated — are the sort of detail expected to be set out in regulations rather than in the Bill itself. Because of that, it would be unwise to build your rota policy around specific numbers today. The sensible approach is to understand the direction of travel and get your record-keeping in order.

What is law now versus what is still to come?

This distinction matters, so here it is clearly.

Already the law today: zero-hours contracts are lawful; exclusivity clauses in them are unenforceable; workers accrue holiday and must be paid at least minimum wage for hours worked; and workers have the right to request a more predictable and stable working pattern in certain circumstances.

Proposed under the Employment Rights Bill (not yet fully in force): the duty to offer guaranteed hours based on a reference period; the right to reasonable notice of shifts; and payments for shifts cancelled or changed at short notice. These are expected to be brought in gradually, with detail confirmed through later regulations. Do not assume any particular commencement date — check the current position with a reliable, up-to-date source or take advice before you change contracts.

How can accurate hours records help you prepare?

Here is the practical thread running through all of these proposals: they depend on knowing exactly how many hours each person has actually worked, and when. A duty to offer guaranteed hours based on a reference period only works if you can look back over that period and see the real pattern. Reasonable notice of shifts and short-notice payments only work if you can show when a shift was scheduled and whether it changed.

If your hours are tracked on paper, in a group chat, or in someone's memory, that is going to become a real problem. Reconstructing months of shift patterns from scraps is slow, error-prone and hard to defend if a worker disagrees with your figures. Employers who already keep clean, reliable records will find it far easier to adapt — whether that means calculating a fair guaranteed-hours offer or evidencing the notice you gave.

Good records also protect you more broadly: for minimum wage compliance, holiday accrual, and any dispute about who worked what. The businesses that cope best with regulatory change tend to be the ones that already had their basics in order.

Getting your record-keeping ready without the admin headache

You do not need an enterprise HR system to keep solid records. What you need is a simple, tamper-proof way for staff to clock in and out, and a clear history you can look back over. That is exactly what Kiwii is built for. Staff can clock in straight from WhatsApp — no new app to download — or from the mobile app or a smartwatch. Each record is time-stamped and can include geolocation, so you have a dependable, tamper-resistant history of hours actually worked rather than rough estimates.

When the guaranteed-hours proposals do land, having that reference-period data already captured means you can work out a fair offer from real figures instead of guesswork. And day to day, it takes the friction out of rotas, payroll and minimum wage checks for hospitality, retail and beauty businesses that would rather be serving customers than wrestling with spreadsheets.

The Employment Rights Bill is not settled yet, and the detail will keep developing. The best move a small employer can make now is not to overhaul contracts prematurely, but to make sure the hours behind them are recorded accurately and clearly. Get that foundation right and, whatever the final rules look like, you will be ready to adapt.

Want tidy, tamper-proof hours records before the rules change? Take a look at how Kiwii tracks staff time via WhatsApp, mobile and smartwatch — and see how simple keeping accurate records can be.