HR Dept responds to Government consultation on zero-hour and similar contracts

The HR Dept has responded on to the recent Government consultation on changes to zero-hour and similar contracts, on behalf of SMEs across the country.

As a business who supports more than 5,000 small and medium-sized businesses across the UK, our response is informed by extensive practical experience of how SMEs recruit, organise and manage people across a wide range of sectors, together with direct discussions with employers, including an SME roundtable specifically considering these proposals.

We support the Government’s objective of improving security and predictability for workers and employees, and of addressing situations where flexibility has become genuinely one-sided. There are cases where people remain on zero-hours or very low-hours arrangements despite working regular, predictable hours for a sustained period. Those arrangements need to be understood. Our concern is with the proposed mechanism.

We do not believe an automatic guaranteed-hours duty, based predominantly on historic working patterns, is the most proportionate or effective way to address the problem. The complexity of the consultation itself demonstrates the difficulty. What initially appears to be a relatively simple proposition - hours worked becoming hours that must subsequently be offered - requires detailed rules on thresholds, reference periods, regularity, distribution of hours, mean or median calculations, temporary circumstances, repeated offers, collective agreements and enforcement.

For SMEs, this is not simply technical drafting. It translates directly into management time, administration, additional resources, system changes, and costs. Designed inefficiency and complexity.

Our central recommendation is therefore that the Government reconsider the automatic guaranteed-hours mechanism within the Employment Rights Act and instead develop a strong and enforceable right to request increased or more predictable contractual hours, with a requirement for genuine consideration and objective justification where a request is refused.

This should sit alongside proportionate protections for shift notice and late cancellation, a better understanding of flexible contractual alternatives, and a funded programme of practical support to help SMEs improve workforce planning and implementation.

The HR Dept recommends that the government:

1. Reconsider the automatic guaranteed-hours mechanism and instead develop a robust right to request increased or more predictable contractual hours.
2. Require employers to genuinely consider requests and objectively justify refusal, with an effective route to challenge repeated unreasonable refusal where regular and predictable work continues.
3. Preserve genuine worker choice and actively promote alternative contractual arrangements, including longer periods over which guaranteed hours can be reconciled.
4. Use seven days as the normal expectation for reasonable shift notice, while retaining flexibility where shorter notice is objectively reasonable.
5. Apply cancellation compensation where a confirmed shift is cancelled, moved or curtailed less than 24 hours before it starts and the reason was reasonably within the employer’s control.
6. Leave the level of compensation to further consideration, including whether the principles underlying statutory guarantee pay could provide an appropriate proportionality benchmark.
7. Provide an appropriately safeguarded workforce-agreement alternative for non-unionised employers where collective agreements can modify the statutory framework.
8. Provide funded practical SME support covering workforce planning, contractual alternatives, systems, implementation and manager capability.
9. Use technology and AI to help businesses understand workforce data and identify where contractual arrangements could appropriately be improved.
10. Undertake a further period of meaningful, proactive SME engagement and consultation before the detailed regulations are finalised.