News / Member Insight / Business operations

Zero hours contract reforms & what they mean for hospitality businesses

The Government’s proposals on “ending one-sided flexibility” signal a move away from zero and low hours contracts towards greater predictability and security for workers. With more formalised working arrangements on the horizon, hospitality businesses must balance complying with the new framework and preserving the flexibility of their workforce.

Workers' three core rights

The Government’s proposed framework centres on three core rights for qualifying workers:

Guaranteed hours, based on working patterns over a reference period.
Reasonable notice of shifts.
Compensation where shifts are cancelled, curtailed or moved at short notice.

These measures are intended to introduce predictability and security while still enabling those who value flexibility to retain it. This balance is important in all sectors — but in hospitality, it’s essential.

Hospitality's reliance on flexible

Hospitality depends on flexible labour more than most sectors. Whether responding to weekend peaks, seasonal trends, weather-related footfall or major events, operators need to be able to adapt as quickly as demand changes.

That flexibility is also valuable for many workers, including students, working parents and people with caring responsibilities. For businesses, it’s an operational necessity. A sudden heatwave, sporting fixture, rail strike or unexpected increase in bookings can change staffing requirements overnights, so any regulatory framework must take these realities into account to avoid unintended consequences.

This creates a clear tension at the heart of the reforms. Too little regulation could leave workers exposed to ongoing instability, while too much could restrict the flexibility that hospitality businesses rely on.

Although much of the detail is still subject to consultation, the likely direction of travel is becoming clearer. Businesses will need to move away from informal or reactive workforce planning and adopt a more structured, data-led approach.

New requirements for employers

1
Guaranteed hours
Employers will be required to offer contracts that reflect individuals’ actual working hours over an initial reference period (the Government’s preference is 12 weeks, although this remains under consultation).

For hospitality, this raises immediate questions such as how seasonal fluctuations should be reflected and whether a 12-week period is too short to capture genuine demand cycles.

There’s a growing view within the sector that longer reference periods (for example, 26 weeks) would provide a more accurate picture of typical working patterns.
2
Notice of shifts
The requirement to provide reasonable notice is likely to make last-minute rota changes (which are currently common in the sector) more difficult to manage.

While this will provide greater certainty for workers, businesses must rethink how they plan and structure their rotas — particularly where demand remains unpredictable.
3
Cancellation payments
The proposed right to compensation for short-notice changes is likely to have a direct impact on how shifts are managed in practice.

For operators already working within tight margins, this could be one of the most impactful elements of the reforms.

Employers' strategic opportunity

It would be easy to see these reforms mainly as a source of additional cost and reduced flexibility. Compliance is likely to require investment in areas such as systems, training and more structured processes. However, the changes also create a wider strategic opportunity.

A more predictable and stable working environment could help to tackle some of the sector’s long-standing challenges, particularly around staff retention and turnover. Greater certainty may also improve engagement and productivity, while helping to change perceptions of job security in the sector.

Some businesses in the sector are already beginning to adopt hybrid models that combine guaranteed hours with the option to offer additional flexible shifts. This can give employers the operational agility they need while providing workers with greater stability. The proposed reforms are likely to accelerate this shift.

Can flexibility be retained?

The true impact of the reforms will depend heavily on the detail that is still to be confirmed through the consultation process.

This includes the:

hours threshold for low-hours workers
level of regularity required during the reference period
length of the initial and subsequent reference periods
definition of “reasonable notice”.

These aren’t simply technical points. Each will play a significant role in determining whether the reforms achieve their aim of ending one-sided flexibility or fall short in practice.

The key will be finding the right balance between worker protection and operational flexibility, so that the reforms deliver their intended benefits without creating unintended challenges. Put simply, can the law end one-sided flexibility without removing flexibility altogether?

Have your say on the consultation

This is an important opportunity for hospitality businesses to engage. The consultation is your chance to influence how these rights are implemented and ensure that the realities of managing a hospitality business are properly reflected. Have your say before 25 August 2026.

You can also read our four practical step for employers to start taking now ahead of the reforms to zero and low hours contracts.

Learn more

If you’d like more information about these changes and how best to manage your workforce, talk to our award-winning employment team.

From reviewing and drafting contracts of employment to running training sessions and resolving disputes, we have the expertise that you need to prepare for the changes ahead.

Check out our guide to the Employment Rights Act — the most significant update to UK employment law in decades — including what’s changing and when.