Have your Say on Upcoming Changes to Zero-Hours Contracts and Agency Worker Regulations

When the Government won a landslide election back in the summer of 2024,  strengthening employment rights was high on their agenda. The Manifesto pledged to “deliver the biggest upgrade to rights at work for a generation” through banning “exploitative” zero-hours contracts, a rise to the minimum wage, an increase in day-one rights and an end to “fire and rehire”. Since then, the Employment Rights Act 2025 has been passed into law, bringing with it new rules, regulations and a step-change to how we work as businesses and employers.  

While some of these pledges have already come into effect, the Government is still consulting on new legislation affecting zero-hours contracts and agency work. Launched on 2 June, Make Work Pay: ending one-sided flexibility – reforms of zero hours and similar contracts, represents the largest and most impactful employment rights consultation affecting the warehousing sector since the election.  

The purpose of this consultation is for the Government to test key proposals with a wide group of stakeholders, including workers, employers, trade bodies and charities. The major proposal identified in the consultation document relates to zero-hours contracts. The Government proposes to implement a 12 week ‘qualifying period’ for guaranteed hour offers to those on zero-hours contracts.  

This would mean that a business would be legally required to offer a guaranteed contract to ZHC workers after 12 weeks, with the hours stipulated within that contract taken as the average amount of hours worked during the period.  

For example, a zero-hours, temporary or agency worker employed at a large warehouse over the Christmas period, say the 12 weeks from late October to mid-January, may work an average of 45 hours a week. Following the end of the 12-week period in mid-January, that employee would legally be entitled to a guaranteed contract from their employer stipulating that they would be granted 45 hours per week of paid work. 

However, for a sector defined by substantial seasonal peaks and troughs, significantly affecting demand and the need for labour, this model clearly does not work. In this example, the employer, legally required to offer a contract of 45 hours a week based on the hours worked during a busy period, will be left with excess labour during quieter periods.  

The UKWA has consistently called for the ‘qualifying period’ the Government to be extended to 52 weeks. Put simply, looking at hours across a year is the only way in which seasonal peaks and troughs can truly be accounted for and averaged out. The average hourly figure taken from a 52-week period is much more representative of total hours worked than a 12-week period and would lead to security in work for both employer and employee. The employee knows they are not being offered an unsustainable or unrepresentative number of hours purely to comply with regulation, and the employer can safely plan for the future without being required to offer unsustainable contracts to short-term or flexible-working employees. 

In addition, the Government wishes to establish a threshold for reasonable notice for cancelled shifts. If the employee is not given sufficient notice before a cancellation, the Government proposes to require the business to pay a proportion of the shift pay to that employee (to account for factors like childcare costs, travel and the financial loss of not working). Again, this notice threshold must not be so long as to make it impossible for businesses to adjust staffing levels quickly in response to unforeseen changes. 

The UKWA does not oppose clear, well-defined employment rights that let employers and workers know where they stand. However, reforms to these rights must be evidence-based and sector-informed. The UKWA has repeatedly argued that a ‘one-size-fits-all’ approach to employment regulation risks ignoring the very nature of flexible industries such as warehousing. This flexibility is exactly what keeps the economy moving, particularly during times of increased demand or supply chain disruption. The Government must consider this, and potential constraints on businesses, when defining the future landscape of employment regulation.   

Business can respond to the consultation directly here. We will also be responding on behalf of the sector, and welcome input from any members likely to be affected. If this sounds like you, please contact me at karan.chhabra@ukwa.org.uk.