The UK Government has launched a consultation on new Guaranteed Hours rules that could reshape the use of zero-hours and low-hours contracts across retail, hospitality and other sectors that rely on flexible staffing.
The proposals form part of the Employment Rights Act 2025 and are intended to give workers greater certainty over their income and working patterns.
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Under the consultation, qualifying workers on zero-hours or low-hours contracts would gain the right to be offered a contract that reflects the hours they regularly work. The Government is considering a 12-week reference period, meaning employers would review hours worked over three months and offer guaranteed hours based on that pattern.
Workers would also receive stronger rights to reasonable notice of shifts and compensation when shifts are cancelled, shortened or moved at short notice.
The consultation, which closes on 25 August 2026, seeks industry feedback before the detailed regulations are finalised.
What guaranteed hours means
The Guaranteed Hours proposal is aimed at reducing what the Government describes as “one-sided flexibility” in the labour market. While zero-hours contracts would not disappear entirely, workers who regularly work predictable hours could gain the right to a contract reflecting those hours.
The Government is consulting on where the threshold for “low-hours” contracts should be set, with options ranging from eight to 20 hours per week. Workers falling within that category could qualify for the new protections.
The reforms are part of a broader package designed to provide greater predictability over earnings and work schedules. Ministers say the changes will help workers plan finances, childcare and other commitments more effectively.
Retail sector concerns
Retailers are among the most vocal respondents to the consultation, arguing that the proposals could create challenges for a sector that experiences large swings in demand throughout the year.
The British Retail Consortium (BRC) has warned that a 12-week reference period may not reflect the seasonal nature of retail employment, particularly during peak trading periods such as Christmas.
The organisation says that anything below 26 weeks could leave retailers with limited options other than reducing the number of flexible roles available during busy periods.
Helen Dickinson, Chief Executive of the BRC, said government should “crack down on bad employers by all means”, but warned against “adding costs and rules that deter good employers from hiring in the first place”.
She added that retail provides “a lifeline into work for hundreds of thousands of young people each year”.
The BRC has also argued that classifying contracts of up to 20 hours as low-hours could require employers to make repeated guaranteed-hours offers to a large number of part-time workers.
The organisation believes long notice requirements for shift changes could be difficult to operate in a sector where customer demand can change quickly.
Retail industry concerns come against a backdrop of wider debate about the impact of employment reforms on hiring, particularly for young and part-time workers. Some employers fear increased labour costs and reduced flexibility, while supporters argue the changes will address long-standing insecurity in the labour market.
How retailers are responding
Many retailers are now reviewing workforce planning, contract structures and scheduling practices as they prepare for potential implementation of the new rules.
Industry groups are focusing on influencing the consultation process rather than opposing the principle of greater security for workers.
The BRC has called for extensive engagement between government and major employing sectors before final decisions are made. According to the organisation, the design of the rules will be critical in determining whether retailers can continue offering flexible part-time work while complying with new employment rights.
For retailers, the key issues include the length of the reference period, the definition of low-hours contracts and the operational requirements surrounding shift notices and cancellations.
The consultation is expected to shape how businesses balance labour flexibility with the Government’s objective of providing workers with greater security and predictability.
The final regulations have yet to be published, but the consultation marks a significant step in the UK’s ongoing reform of zero-hours contracts and flexible working arrangements.
For retail employers, the outcome could have a lasting impact on recruitment, workforce management and the availability of flexible jobs across the sector.
