New documents have been published to sit alongside the Government’s Make Work Pay: ending one-sided flexibility – reforms of zero hours and similar contracts consultation.
The Employment Rights Act 2025 (ERA 2025) introduces new rights in relation to zero hours, low hours and agency workers. These are:
- a right to guaranteed hours
- a right to reasonable notice of shifts and changes to them
- a right to payment for shifts cancelled, curtailed or moved at short notice.
The consultation, which closed on 25 August 2026, seeks input on details of the new rights, to be set out in regulations.
Including new options assessments and research papers, these documents reveal that the direct cost to employers of the reforms could be between £350 million and £2.9 billion per year. Based on what the Government has been able to monetise, the reforms altogether could lead to a net cost of between £300 million and £1.4 billion per year.
In the new documents, it is acknowledged that the reforms could make it harder for employers to respond to changing demand and have knock-on effects on output. However, they also highlight the benefits that these reforms could bring. These include a positive impact on growth through improved worker wellbeing and engagement, which can lead to increased productivity, better workforce planning, investment in staff, and the creation of a more level playing field for employers who already provide secure and predictable work.
There were also wider benefits due to higher wellbeing and labour market participation identified. Stress, depression and anxiety, according to Government data, accounted for 22.1 million lost working days in 2024/25. This was equivalent to around £6.5 billion in lost output. These reforms, the Government claims, could help to reduce these numbers. The research also found that the right to guaranteed hours could make it easier for around 4 in 10 people not in work to return to work.
The Government will review responses to the consultation and publish secondary legislation to bring the new rights into force. These are expected to be implemented in 2027.
