Zero-Hours & Agency Workers: New Rights Your Business Must Know

Zero-hours contracts and agency workers have long played a crucial role in helping SMEs remain flexible, especially in sectors like hospitality, care, retail and logistics. But with new legislation on the horizon, employers must prepare for change because the rules around casual and agency work are about to get tougher.

The Employment Rights Bill and related reforms are set to strengthen protections for workers in non-traditional roles, aiming to end exploitative practices and bring greater fairness and transparency into casual work arrangements.

For SMEs, this isn’t just a compliance issue, it’s a chance to revisit how flexibility works in your business and ensure your practices reflect the future of work.

What’s Changing?

Although the legislation is still working through Parliament, key reforms are expected to come into force by 2027. Here are the headline changes likely to affect zero-hours and agency workers:

1. Right to Request a Predictable Working Pattern

Casual workers, including zero-hours and agency workers, will gain the legal right to request a more predictable working pattern after a certain length of service — likely around 26 weeks. This could include requesting set days or hours, or moving from ad-hoc work to guaranteed hours.

2. Contracts Based on Actual Working Patterns

One of the most significant reforms proposes that workers on zero-hours contracts should, over time, receive contracts that reflect their actual hours worked, based on a rolling average. For example, if someone regularly works 20 hours a week for three months, they may become entitled to a contract guaranteeing those hours.

This change aims to prevent employers from routinely under-contracting staff, only to rely on them regularly, a practice that can leave workers financially insecure.

3. Minimum Notice for Shift Cancellations

Another change likely to be introduced is a requirement for reasonable notice before shifts are cancelled, along with compensation if workers are sent home at short notice. This is designed to curb the current trend of “on-call” shifts where workers have no certainty and bear all the risk.

4. Enhanced Rights for Agency Workers

The reforms also seek to strengthen protections for agency workers, particularly around equal treatment, fair pay, and job security. This includes improving the transparency of terms and tackling loopholes that allow less favourable treatment in comparison to permanent staff.

Why Are These Changes Happening?

The goal behind these changes is simple: to promote fairness and reduce insecurity for some of the most vulnerable workers in the UK.

Zero-hours and agency contracts have been criticised for offering little protection, particularly for those who rely on them long-term. The government’s proposed reforms are designed to end exploitative practices without removing flexibility entirely.

For SMEs, this means adapting how casual work is managed but it doesn’t mean losing the benefits of a flexible workforce. It’s about striking a fairer balance.

What Do These Changes Mean for SMEs?

If your business uses zero-hours or agency workers, these reforms will have practical implications across several areas:

Payroll and Cost Planning

More predictable working patterns and guaranteed hours mean you’ll need to budget more precisely. Casual workers may move onto fixed-hours contracts, and shift cancellations may carry financial penalties. Forecasting your labour needs accurately will be more important than ever.

Scheduling and Rota Management

With notice requirements for shift changes, you’ll need to plan rotas earlier and communicate changes well in advance. Last-minute alterations could result in extra costs or legal risk.

Contracts and HR Policies

Your contracts will likely need to be updated to reflect new rights, including the procedure for requesting predictable working patterns and how shift changes are handled. Internal policies will also need updating to ensure consistency and compliance.

Communication and Culture

These changes will also require you to engage with your workforce differently. Casual workers must feel confident that they can raise concerns or request changes without fear of losing work. Building trust and clarity into the process is vital.

How to Prepare: Practical Steps for Employers

Change doesn’t have to be disruptive — with the right support, it can be an opportunity to build better practices. Here’s how to prepare:

1. Review Your Zero-Hours Contracts

Start by assessing which staff are on zero-hours contracts and how often they work. If someone is regularly working a fixed pattern, they may soon be eligible to request a more secure arrangement. Now is a good time to:

• Identify recurring working patterns.
• Consider whether these roles should transition to part-time or fixed-hours contracts.
• Ensure your contracts are legally compliant and up to date.

2. Talk to Your Workers

Open up conversations with your casual and agency staff. Let them know that changes are coming and that your business is committed to fair and transparent practices.

This doesn’t just reduce confusion, it also strengthens morale and helps workers feel valued and included.

3. Adapt Your Rostering Systems

To meet notice requirements, you’ll need a reliable rota system that allows you to plan ahead and keep track of communications.

If you’re currently managing shifts through spreadsheets or ad-hoc messages, it might be time to invest in a scheduling tool that can track hours, confirm shifts, and record cancellations properly.

4. Align With Fair Work Principles

Even before the legislation takes full effect, you can start to embed fair practices into your HR framework now. This includes:

• Avoiding short-notice cancellations unless unavoidable.
• Offering shifts consistently and fairly.
• Listening to staff concerns and making adjustments where possible.

Doing this early reduces your risk and helps you build a more sustainable and attractive employment offer, which is particularly useful in a tight labour market.

These changes are designed to support fairer working conditions, but they will require SMEs to shift how they manage casual workers. That might sound challenging, especially if your business depends on short-term staffing. But with the right policies, communication and tools in place, flexibility and fairness can work hand in hand.

The HR Dept Can Help

At The HR Dept, we’re already helping SMEs across the UK review their zero-hours and agency worker arrangements ahead of the coming reforms.

Whether you need a zero-hours contracts support transitioning workers to new terms, or help implementing scheduling systems and training managers we can provide practical, tailored advice to keep your business compliant and your workforce engaged.

We’ll work with you to maintain the flexibility your business needs, without falling foul of future legislation.

Ready to review your contracts or policies? Get in touch with your local HR Dept today for expert, personal support.