Employment Rights Act 2025 — What It Means for Zero-Hours Workers

For over a decade, zero-hours contracts have been a highly controversial part of the UK labour market. While they offer flexibility for some, they often leave workers without financial security, unable to plan their lives, and at the mercy of unpredictable shift cancellations.

The Employment Rights Act 2025 changes all of that. Billed by the government as the biggest upgrade to workers' rights in a generation, the ERA specifically targets the exploitative use of zero-hours contracts.

If you are one of the estimated 1.1 million people in the UK on a zero-hours contract, here is exactly what the new law means for your rights, your pay, and your future.

What Is the Employment Rights Act 2025?

The Employment Rights Act (ERA) 2025 is a major piece of labour legislation designed to end "one-sided flexibility." The government explicitly stated they were not banning zero-hours contracts entirely, as some workers (like students or retirees) genuinely prefer the flexibility.

Instead, the Act gives workers the power to demand stability. It shifts the balance of power, forcing employers to provide regular hours to those who want them, while penalizing companies that cancel shifts at the last minute.

Guaranteed Hours — The Big New Right

The most significant change is the new right to a guaranteed-hours contract. Under the ERA 2025, if you regularly work a certain number of hours over a specific "reference period" (expected to be a 12-week block), your employer is legally obligated to offer you a permanent contract that guarantees those hours.

For example, if you are technically on a zero-hours contract but you have been working 25 hours a week consistently for the past three months, your employer must formally offer you a 25-hour-per-week contract. You are not forced to accept it if you want to remain on zero hours, but the employer must make the offer.

This puts an end to the practice of companies using zero-hours contracts for permanent, full-time equivalent roles to avoid providing job security.

Shift Cancellation Pay — You Must Be Compensated

Before the ERA, it was entirely legal for a manager to text you an hour before your shift to tell you not to come in, leaving you unpaid. That practice is now heavily penalized.

The Act introduces two new rights regarding shifts:

1. Reasonable Notice: Employers must give you a legally defined minimum amount of notice for any shifts they expect you to work.
2. Compensation for Cancellation: If an employer cancels or curtails your shift without giving the required notice, they must pay you compensation. The exact proportion of the shift's wages that must be paid depends on how late the cancellation was made.

This forces employers to plan their rotas properly, rather than using zero-hours workers as an on-demand, cost-free buffer.

Day-One SSP — Sick Pay from Your First Day

Previously, zero-hours workers struggled to access Statutory Sick Pay (SSP) because of the "Lower Earnings Limit" threshold and the rule that you had to be sick for four days before receiving a penny.

The ERA 2025 removes the Lower Earnings Limit and abolishes the three "waiting days." This means that as a zero-hours worker, you are now entitled to Statutory Sick Pay from the very first day you are ill, regardless of how much you earned in the weeks prior.

What These Rights Mean in Practice

For zero-hours workers, these changes mean you can finally plan your life. If you want a mortgage, a guaranteed-hours contract makes it possible. If you need to arrange childcare, the reasonable notice rules mean you aren't left paying a babysitter for a cancelled shift.

However, you must be proactive. Keep a detailed record of the hours you work and the shifts you are given. If your employer fails to offer you guaranteed hours after the reference period, you have the right to take them to an Employment Tribunal.

When Do ERA 2025 Rights Come Into Force?

While the Act passed into law in 2025, some of the specific mechanisms—particularly the guaranteed hours reference period—required extensive consultation with businesses and unions. The core provisions regarding shift cancellations and guaranteed hours are expected to be fully enforceable by early to mid-2027.

Frequently Asked Questions

Does the Employment Rights Act 2025 ban zero-hours contracts?

No. Zero-hours contracts are not banned outright. If you genuinely want to remain on a zero-hours contract because it suits your lifestyle (e.g., fitting around university studies), you can choose to do so.

Do agency workers get the same ERA 2025 rights?

Yes, qualifying agency workers are included in the guaranteed hours provisions. The government has designed the rules specifically to ensure companies cannot use agency loopholes to avoid offering stable hours.

When do ERA 2025 guaranteed hours rights start?

The guaranteed hours provisions are expected to be fully enforceable in 2027, subject to the final results of the government's consultation on the exact reference period.