In our recent webinar, we explored the UK Government’s proposed reforms aimed at banning ‘exploitative zero-hour contracts’. We examined the potential impact these employment law changes could have on an employer’s ability to recruit and retain staff, while also considering how businesses can remain agile and flexible within the new legal framework.
Using our regular engagement polls throughout the session, we gained valuable insight into how employers across various sectors are feeling about these upcoming reforms.
Widespread Use, But Limited Awareness
The majority of participants (85%) indicated that they currently use zero-hour contracts or similar working arrangements with no guaranteed hours. These employers largely operated in sectors such as health and social care, hospitality, education, and travel and tourism.
Despite the common use of flexible working arrangements, 75% of businesses using such contracts admitted to having only limited awareness of the zero-hour contract reforms—highlighting a significant knowledge gap that could impact compliance and preparedness.
Anticipated Challenges for Employers
We asked attendees how they expected the reforms to affect their organisation. As expected, the most frequently cited concern was an increased administrative burden (68%). This was closely followed by:
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Loss of flexibility (67%)
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Rising costs (61%)
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A need for enhanced workforce planning (53%)
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Risk of overstaffing (53%)
These concerns underline the broad and complex implications of the proposed changes, especially for organisations heavily reliant on casual or temporary labour.
Extension of Reforms to Employment Agencies
As the Bill progresses through Parliament, one significant amendment has recently been introduced and accepted: the extension of the reforms to cover Employment Agencies and agency workers.
This means both the agency and the end hirer (the business) will share responsibility for providing agency workers with reasonable notice of shifts. Employment Tribunals will have the authority to determine the division of liability between the two parties in each case.
Furthermore, employment agencies will be responsible for paying compensation for short-notice cancellations or curtailed shifts—although they will be permitted to recover these costs from the end hirer where contractual arrangements allow.
This amendment is particularly important as it brings more workers under the scope of the legislation. In fact, our survey revealed that 45% of respondents use employment agencies, further emphasising the widespread relevance of this reform.
Preparing for the Reforms: What Employers Are Doing
Encouragingly, 52% of employers surveyed reported that they have already begun preparations for the upcoming reforms. One critical step we recommend is carrying out a comprehensive impact assessment for each element of the legislation. We’ve created a tailored impact assessment tool specifically for this area of reform, which is now available on the HR Knowledgebase.
What Support Do Employers Need?
When asked what types of support or information would be most useful, employers identified the following areas:
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HR advice and support: 55%
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Policies: 57%
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Handbooks and contracts: 57%
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Training for line managers: 40%
These results underscore a clear need for practical HR solutions that help organisations implement changes effectively and remain compliant. You can read more about the role of HR in ensuring compliance here.
Key Takeaways
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Zero-hour contracts and other flexible working arrangements remain widely used across multiple sectors, particularly in health and social care.
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Awareness of the upcoming employment law changes is still limited among employers, despite the significant impact these reforms are likely to have.
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Businesses anticipate challenges such as increased administration, higher costs, and reduced flexibility.
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There is strong demand for HR support, particularly around contracts, policy updates, and training for managers.
If your business uses zero-hour contracts or agency staff, now is the time to assess your current arrangements, seek expert advice, and begin preparing for compliance. For more resources and support, visit our Knowledge Base or contact us now.
