Zero-hours contracts are still legal in the UK, but the rules around them are changing fast. The Employment Rights Bill is now the Employment Rights Act 2025, which received Royal Assent in December 2025 and introduces the most significant overhaul of flexible working arrangements in a generation. For hospitality businesses, where zero and low-hours contracts are the norm rather than the exception, the changes are substantial.
The short version: by 2027, workers who have been putting in regular hours will have the right to a contract that reflects those hours. You'll need to give reasonable notice of shifts. And if you cancel shifts at short notice, you'll likely owe compensation. None of this is a ban on flexible staffing, but it is the end of one-sided flexibility.
Here's what the legislation actually requires, what's already changed, and how to get your rotas and contracts ready before the deadline lands.
What has already changed (April 2026)
Not everything is waiting for 2027. From April 2026, statutory sick pay became a day-one right for all workers, regardless of earnings; including those on zero-hours contracts. If a zero-hours worker calls in sick, they are entitled to SSP from their first day of absence, with no lower earnings threshold and no waiting period.
For hospitality businesses used to managing sick cover through informal arrangements, this is a real operational shift. It also means accurate absence records matter more than they used to; you need to know who is sick, when, and for how long.
What is changing in 2027
The bigger changes (the ones that directly affect how you structure rotas and contracts) are targeted for 2027, with secondary legislation expected in late 2026.
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Guaranteed hours. Workers on zero or low-hours contracts who work regular hours over a 12-week reference period will have the right to a contract that reflects those hours. If a bar worker has been consistently working 18 hours a week for three months, you will be required to offer a contract for those hours. Workers can decline if they genuinely prefer to stay flexible, but the offer must be made.
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Reasonable shift notice. You will need to give workers reasonable advance notice of their shifts, including the day, time, and number of hours. Last-minute rota changes won't disappear, but they'll come with strings attached.
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Cancellation pay. If you cancel or curtail a shift at short notice, workers will be entitled to compensation. The exact thresholds and amounts will be set in secondary legislation, but most employment advisers expect a sliding scale: higher compensation for same-day cancellations, lower for those with more notice.
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Agency workers included. The guaranteed hours and notice requirements apply to agency workers too, not just direct employees. If you use agency staff regularly, you'll need to factor this into those arrangements.
Why hospitality is particularly exposed
Around 27% of people on zero-hours contracts in the UK work in accommodation and food — by far the highest concentration of any sector. Hospitality also has the highest seasonal volatility, the most last-minute rota changes, and the greatest reliance on casual, ad-hoc staffing.
That means two things. First, the operational impact of these changes is larger for hospitality than for most other industries. Second, the businesses least prepared are likely to be smaller independents and multi-site operators who are still managing rotas in spreadsheets and coordinating changes over WhatsApp; exactly the model the legislation is designed to disrupt.
Step 1: Run a 12-week audit before the rules land
The guaranteed hours obligation is triggered by a 12-week reference period. So the most important thing you can do now is understand what your zero and low-hours workers have actually been working.
Pull the last 12 weeks of rota and timesheet data for every worker on a zero or low-hours contract. Calculate their average weekly hours. Anyone with a consistent pattern (say, three or four shifts most weeks) is likely to qualify for a guaranteed hours offer once the regulations come into force.
Build a simple table for each site:
| Name | Contract type | Role | Venue | Avg weekly hours (12 wks) | Likely guaranteed hours band |
|---|---|---|---|---|---|
| Example | Zero hours | Server | Restaurant A | 16 | 16 hours |
| Example | Low hours (4) | Bartender | Bar B | 19 | 16–20 hours |
Anyone with a regular pattern goes into your "qualifying" bucket. This is the group you need to prioritise when redesigning contracts.
Alongside the hours audit, map where you rely on last-minute cancellations. Export a recent 8–12 week period and log: shifts cancelled same-day, shifts cancelled the day before, and staff sent home early. Every instance is a potential compensation liability once the regulations are in force.
Step 2: Design contract bands that match real working patterns
Once you know what people actually work, you can build contract structures that reflect it. The legislation expects guaranteed hours offers to match the hours regularly worked in the reference period, not a random number written into a contract years ago.
For most hospitality businesses, that means a small set of contract bands per role:
| Role | Contract band | Typical pattern |
|---|---|---|
| Front-of-house | 8 hrs/wk | 2 × weekday evening shifts |
| Front-of-house | 16 hrs/wk | 2 × weekend shifts + 1 weekday |
| Kitchen | 24 hrs/wk | 3 × prep/service shifts |
| Bar staff | 12 hrs/wk | 3 × late shifts |
| Housekeeping | 20 hrs/wk | 4 × daytime shifts |
Your 12-week data tells you which band each worker falls into. That way the move to guaranteed hours is grounded in what's already happening, not a negotiation from scratch.
One side benefit: more stable contracts tend to reduce turnover. For hospitality businesses spending heavily on recruitment, that's worth factoring in.
Step 3: Set rota publication rules and a cancellation pay policy
The shift notice and cancellation requirements will be set in secondary legislation, but the direction is clear. A safe working assumption for planning purposes:
- Rotas published at least 14 days in advance. This is the standard most employment advisers are working to.
- A lock point at 48 hours. Changes after this point should require sign-off and trigger a compensation calculation.
- A simple cancellation pay structure. A defensible approach: 100% of shift pay if cancelled same-day, 50% if cancelled 24–48 hours before, nothing if cancelled with more than 48 hours' notice. This will need to align with whatever thresholds the secondary legislation sets, but having a policy in place before then puts you ahead.
Put these rules in writing. A short rota policy document covering publication deadlines, lock points, the change request process, and how cancellation pay is calculated protects you operationally and demonstrates good faith if a worker ever disputes a cancellation.
Step 4: Update contracts before 2027
Most zero-hours contracts currently in use were written for old rules: no guaranteed hours, no obligation to pay for cancelled shifts. Those clauses will need to change.
At minimum, updated contracts should include:
- A guaranteed hours clause linked to the 12-week reference period
- A review mechanism (every 6 or 12 months) to reassess hours as patterns change
- Clear wording on when and how cancellation pay is triggered
- An opt-out clause for workers who genuinely prefer to stay on a fully flexible arrangement
Get your contracts reviewed by an employment solicitor before the secondary legislation is published. The details will matter, and retrofitting a template is harder than getting ahead of it.
What this means for your rota process
The practical impact of all this is straightforward: you need to know more, in advance, with a cleaner record of what was agreed and when.
That's hard to do in a spreadsheet. When rotas live in Excel and changes happen over WhatsApp, there's no timestamp on when a shift was offered, no record of when it was cancelled, and no automatic calculation of what compensation might be owed. Every manual step is a potential gap in the audit trail.
Workforce management tools like Shiftbase are built for exactly this kind of operational discipline — publishing rotas in advance, tracking changes, connecting absence records to the schedule, and giving everyone a single live view of what's happening. If you're still on spreadsheets, the ERB is a reasonable prompt to reconsider.
ERB compliance checklist for hospitality businesses (2026–2027)
Use this as a working checklist ahead of the 2027 implementation deadline:
- 12-week hours audit completed for all zero and low-hours workers
- Qualifying workers identified and contract bands agreed
- Rota publication deadline set (recommend: 14 days)
- Shift lock point defined (recommend: 48 hours)
- Draft cancellation pay policy written and costed
- Contracts updated to include guaranteed hours clause and opt-out option
- Rota and cancellation policy documented in writing
- Managers briefed on new rules and record-keeping requirements
- Payroll and HR processes updated for day-one SSP (already in force)
- Review date set ahead of secondary legislation (expected late 2026)
