Zero-hours contracts (ZHCs) are a controversial, but certainly not new, feature of the UK labour market. While they offer flexibility for some employers and workers, for many they represent insecurity, unpredictability and a lack of basic protections. Recent data and legislative proposals suggest we may be at a turning point. In this article, we look at the current state of ZHCs, the arguments for reform and what proposed changes could mean for workers and businesses.
What Are Zero-Hours Contracts?
A zero-hours contract is an employment agreement where the employer is not required to guarantee a minimum number of working hours. Workers are only paid for the hours they have actually worked. This arrangement allows employers to have a flexible approach to labour supply, but leaves many workers facing financial unpredictability and with limited employment rights.
How Big Is the Issue? Let’s Look at Some Key UK Statistics
Recent studies and surveys show the extent and impact of zero-hours contracts in the UK:
- As of 2023–2024, around 1.1 million people in the UK are working on zero-hours contracts.
- This is the second highest level on record, with approximately 1.17 million people on ZHCs between January and March 2025.
- Of those on ZHCs, 73.5% are in “severely insecure work,” defined as having both contractual and financial insecurity and lacking access to certain rights and protections. Only about 6.1% are in secure employment with regular income and full rights.
- Young workers are especially affected. The number of 16-24-year-olds on ZHCs increased by 23% in one year (2022 to 2023), rising from approximately 386,000 to around 474,000
- Many people stay on zero-hours contracts for long periods. Around 66% of ZHC workers have been with the same employer for over a year; 45% for over two years; and around 12% have been on zero-hours contracts with the same employer for 10 years or more.
- A TUC poll found 84% of workers on zero-hours contracts want regular hours, while only 14% do not. Many struggle to meet living expenses as a result of insufficient hours. Also, over 50% have had shifts cancelled at less than 24 hours’ notice; with most receiving no compensation for cancelled shifts.
Why the Concern?
These numbers give rise to several issues:
- Financial Instability – Without guaranteed hours, budgeting and planning become very difficult, especially for those supporting families or with caring responsibilities.
- Employment Rights & Protections – ZHC workers tend to miss out on many rights that permanent or fixed-hour employees receive, or find them harder to enforce.
- Long Term Insecurity – Being “permanently temporary” (i.e. being employed under ZHCs long term) undermines job security, career progression, mental health and well-being.
- Inequality – The burden falls unfairly on certain groups: younger workers, Black and minority ethnic workers, women. These can increase societal inequalities.
Government Proposals & Legal Developments
Given the scale of the problem, the UK government has made several moves toward regulation. Key proposals include:
- Employment Rights Bill: A major reform bill dubbed “the biggest upgrade to workers’ rights in a generation”. Among its measures are proposals to ban “exploitative zero-hours contracts”.
- Guaranteed Hours: The Bill proposes that workers should have the right to a contract reflecting the hours they regularly work, based on a reference period. This aims to stop employers using ZHCs to avoid giving minimum hours.
- Extension to Agency Workers: Agency workers could be included in the ban or stricter regulation, so that using agency work does not provide a loophole.
- Roll-out Timeline: Though the legislation has passed certain stages, the planned ban on exploitative ZHCs is expected to come into effect by 2027, with earlier phases or consultations to come before it is fully implemented.
What Are the Pros & Cons of the Proposed Reforms?
If the proposed reforms are implemented, the implications could be significant:
The pros:
- Addresses worker exploitation and improves job security.
- May reduce poverty and improve wellbeing by enabling people to plan their finances.
- Could reduce turnover costs and encourage employee loyalty and productivity.
- Promotes fairer treatment across workforce, especially for vulnerable groups.
Cons:
- Employers may argue the changes reduce necessary flexibility, especially for sectors with fluctuating demand (e.g. restaurants, events).
- Costs could rise as guaranteed hours or compensations might increase wage bills or administrative overheads.
- Some workers prefer ZHCs for flexibility (e.g. students, secondary carers). Reforms must balance protecting those who want stability against those who want choice.
What Should Workers & Employers Do Now?
For Workers:
- Keep detailed records of hours worked, shifts offered, shifts cancelled.
- Check whether you’d benefit from or be eligible for guaranteed hours under upcoming law.
- Seek advice if you feel your contract is being used unfairly or may be seen as exploitative (e.g. repeated cancellations without compensation).
For Employers:
- Audit your use of zero-hours contracts: which workers have been on them for how long? Are there patterns of regular hours? Do they still fit the bill?
- Plan for compliance: consider liaising with employees and where appropriate transitioning long-serving ZHC workers to contracts with guaranteed hours.
- Ensure communication and transparency with staff to explain changes.
- Review scheduling, shift-cancellation policies, compensation for changes and ensure you have administrative capacity to meet new obligations.
Conclusion
For many years zero-hours contracts have represented controversy in UK employment law in the quest to find balance between flexibility and fairness. The latest data shows there are more than a million people stuck in insecure work, many for years, often with little control over their hours or stability.
The proposed reforms, especially via the Employment Rights Bill, could bring meaningful change by banning exploitative contracts, guaranteeing hours for those who regularly work them, extending protections to agency workers, and enforcing new rights in practice. But implementation will matter. How “exploitative” is defined, what reference periods are used, and how businesses adapt will all need to be considered.
For many workers, these reforms can’t come soon enough. For employers, change is on the horizon and preparation will be key.
If you’re affected by zero-hours contracts, either as a worker seeking stability, or as an employer needing to prepare for upcoming legal changes, we can help. At Consilia Legal we offer expert employment law advice to both employers and employees to help you navigate contracts, rights, and whether you may be entitled to guaranteed hours or compensation.
Contact us today to arrange a free 15 minute consultation. Call 0113 322 9222 or email enquiries@consilialegal.co.uk.