It’s zero hour for temporary staff
Kirstie Smith on what the Employment Rights Act 2025 could mean for industries that rely upon seasonal workers.
During the recent festive period, city centres were packed with shoppers and revellers enjoying Christmas get-togethers. This influx of trade placed extra pressure on many industries, including retail, hospitality and courier services.
Many businesses meet this demand by hiring additional seasonal staff, with household names like M&S and Tesco launching Christmas recruitment drives as early as October each year. Seasonal workers tend to be hired on fixed term or zero-hour contracts to maximise flexibility for employers and the staff themselves.
So how does the much-discussed Employment Rights Act impact seasonal workers?
Despite snappy headlines suggesting otherwise, the Employment Rights Act does not ban employers from issuing zero-hour contracts. Instead, the Act introduces a more discrete requirement: employers will, in certain situations, be obliged to offer guaranteed hours to workers on zero-hour and certain minimum-hour contracts.
Employers will be required to offer a number of guaranteed hours that reflects the number of hours worked by that individual during a specific reference period, which is yet to be defined by legislators.
Depending on the reference period, there is a possibility that seasonal staff on zero-hour and certain low-hour contracts could be entitled to be offered a contract that represents the hours they have worked up until that point.
We could see employers issuing staff fixed-term contracts with guaranteed hours as opposed to zero-hour contracts. However, depending on how many hours of work are offered in the fixed-term contract, employers may still be caught by the guaranteed hours provisions despite there being no consistent demand for staff to service those hours outside of the festive period.
The Act also provides for those employed under zero-hour contracts or contracts which do not provide for specific shift patterns, to receive reasonable notice of shifts. There is also provision for compensation for workers whose shifts are cancelled, moved or curtailed at short notice. These provisions are of relevance to seasonal work where demand can often change at short notice.
Another key question is when will these changes take effect. The answer is that they are unlikely to take effect before 2027, and perhaps even that is an optimistic timeframe. The Employment Rights Act received Royal Assent on 18 December 2025. However, Regulations are required to expand on the zero and low-hour contract provisions and provide much of the key detail. There will also be a public consultation in the coming months in which businesses can play a part in shaping how these provisions will play out in practice.
Prior to receiving Royal Assent, there was a lengthy period of back-and-forth debates between the House of Commons and House of Lords. During those debates, the House of Lords recognised that certain sectors rely heavily upon seasonal workers at various points throughout the year and encouraged the Secretary of State to have regard to the specific characteristics and requirements of seasonal work when drafting the future Regulations.
In the meantime, employers utilising zero or low-hour contracts should consider auditing their workforce to identify how many workers are engaged on zero hours and minimum hours contracts, as well as reviewing internal systems for workload projection, allocating shifts and shift changes.
Kirstie Smith is a Solicitor in Anderson Strathern's employment team