ERB and the ban on exploitative zero hours contracts
- Magic Connect
- Jul 2
- 4 min read
The Employee Rights Bill (ERB) is the biggest upgrade to workers’ rights in a generation. It introduces sweeping reforms to employment law, including a ban on exploitative zero-hours contracts. With the government updating the scope of the changes, we delve into the detail and explain what they mean.
The data
The number of young workers on zero-hours contracts reached a new record high in 2023/24, according to a study by The Work Foundation thinktank. It found that one in 10 (13%) young workers in the UK were on a zero-hours contract in 2023, and that around three-quarters (73.5%) of people aged 16 to 65 were on a zero-hours contract.
Other research by campaign group Rest Less, investigated the 50s and over workforce. The study found that more than 300,000 workers over the age of 50 are employed on zero-hours contracts, which is a huge increase on the 190,000 workers in this age group a decade ago. The 50s and over workforce represents 26% of the entire zero-hours contract workforce. Combined, the under-25s and over-50s make up 66% of the total zero-hours contracts workforce.
These figures confirm there are huge numbers of people in the UK who are in severely insecure work, face contractual and financial insecurity, and a lack of access to rights and protections.
The Bill
The ERB is set to clamp down on these so-called ''exploitative'' zero-hours contracts, with proposals for low and zero-hours workers covering three key areas:
A right for low and zero hours workers who satisfy certain conditions to be offered guaranteed hours at the end of a relevant reference period that reflects the hours worked during that reference period.
A right for zero hours and other specified workers to be given reasonable notice of shifts and changes in shifts.
A right for zero hours and other specified workers to payment each time a work shift is cancelled, moved or curtailed at short notice.
On 6 March 2025, the government published responses to a consultation on the application of zero-hours contracts measures to agency workers. In its announcement, the government confirmed it will table amendments to ERB so that it includes a framework for the extension of the application of each of the original planned measures to include agency workers.
How the measures will work in practice will be the subject of secondary legislation, but the consultation response does provide some information on what this could entail, specifically:
Responsibility for providing the agency worker with reasonable notice of shifts will be on both the employment agency and the end hirer – with the tribunal able to apportion liability based on the responsibility of each party in a given case.
Responsibility to pay any short notice cancellation or curtailment payments will be on the employment agency but they will be allowed to recoup this from the hirer where they have arrangements with the hirer covering this.
The Secretary of State will have the right to publish regulations stipulating the form and manner in which an agency worker should receive notifications of shifts, cancellations or curtailments.
Responsibility to offer guaranteed hours to qualifying agency workers will fall on the end hirer.
There will be an exception to the requirement to offer guaranteed hours where there is a genuine temporary work need (such as seasonal demand).
The current system of extended hire periods and transfer fees under The Conduct of Employment Agencies and Employment Businesses Regulations 2003 will continue to apply.
The impact
All of this means that workers – including agency workers - on zero-hours or low-hours contracts are to be granted the right to guaranteed-hours contracts if they work regular hours over a 12-week reference period. This will ensure workers receive a contract reflecting their actual hours worked.
Employees also gain the right to receive notice for any shift changes, providing them with more stability and predictability in their working schedules.
When ERB becomes law, the change will require employers to provide reasonable notice of shifts and compensation when they cancel shifts, which says the government, will give workers security of earnings.
Businesses in sectors that rely heavily on zero hour contracts, such as hospitality, retail, and healthcare, will be particularly affected.
The same could be said for recruitment and employment businesses providing agency or part-time workers, especially to the most affected sectors. Recruiters will have to ensure contracts are more structured and reflective of consistent work patterns. Not only will this make staffing more rigid, but it will also likely increase operational costs as flexibility diminishes.
Some employees may wish to remain on zero-hours contracts, and for these workers, ERB means they will have the right to a guaranteed hours contract if they work regular hours over a defined period.
Agency workers who choose to be on zero-hours contracts will also be made eligible for compensation if their shifts are changed at short notice.
For the government’s full response, see: