UK zero-hours contract reforms may cost employers £2.9 billion, with key worker protections set for 2027
· World · The Independent, Wall Street Journal
The UK government estimates potential costs to employers at up to £2.9 billion for reforms to zero-hours contracts planned under the Employment Rights Act 2025. The proposed changes, set for implementation in 2027, aim to address 'one-sided' workplace arrangements where employees carry all financial risks from fluctuating demand. Key reforms include requiring employers to offer guaranteed hours based on average work hours over a yet-to-be-defined reference period and paying compensation for last-minute shift cancellations. The proposal waters down a 2024 Labour manifesto promise to outright ban zero-hours contracts but marks the most substantial overhaul since such contracts emerged in the mid-1990s. Over 1.23 million UK workers—disproportionately young people and those in retail and hospitality—currently rely on zero-hours contracts as their main employment.
Why it matters
These reforms aim to protect hundreds of thousands of UK workers in precarious jobs while shifting financial risks to employers, likely affecting sectors like retail and hospitality the most.
Read the original report — The Independent
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