The Employment Rights Act 2025 changes will introduce significant new responsibilities for employers over the next few years, particularly around shift scheduling and zero-hours contracts.
One of the biggest changes is expected to come into force in 2027, when employers will be required to provide greater certainty for workers by giving reasonable notice of shifts and compensating employees when shifts are cancelled, moved or significantly reduced.
For businesses that rely on flexible staffing arrangements, particularly in sectors such as hospitality, retail, leisure and care, it’s important to understand what these changes could mean and begin preparing now.
What are the proposed changes?
As part of the Employment Rights Act 2025 changes, the Government has consulted on reforms designed to provide greater security and predictability for workers.
The consultation covers three key areas:
- A right to guaranteed hours.
- A right to reasonable notice of shifts.
- A right to payment when shifts are cancelled, moved or shortened.
The aim is to reduce uncertainty for workers while encouraging employers to improve workforce planning.
Payment for Cancelled or Changed Shifts
Under the proposed legislation, employers will be required to compensate workers if:
- A scheduled shift is cancelled.
- A shift is moved to another day or time.
- A shift is cut short after it has been arranged.
The exact level of compensation has not yet been confirmed. However, employers will generally be expected to make a payment whenever a shift is cancelled or significantly changed.
The Government has indicated there will be certain specified circumstances where compensation may not be required, although these exemptions have not yet been defined.
Where an employer believes an exemption applies, it is likely to be good practice to explain this clearly to the affected worker.
Which Workers Will Be Covered?
The proposed rights are expected to apply to:
- Zero-hours workers.
- Workers on low-hours contracts.
- Workers whose contracts require some work to be offered but do not specify fixed days or working times.
This means the reforms will affect many businesses that currently rely on flexible staffing arrangements to meet fluctuating demand.
Why Hospitality Businesses Should Pay Attention
The hospitality industry is expected to be one of the sectors most affected by these Employment Rights Act 2025 changes.
Many hospitality employers rely on flexible scheduling to respond to customer demand, seasonal peaks and last-minute changes. The introduction of compensation for cancelled or altered shifts could increase staffing costs and require businesses to review how rotas are planned.
Employers may need to:
- Improve workforce forecasting.
- Issue rotas further in advance.
- Reduce last-minute scheduling changes where possible.
- Review employment contracts and scheduling policies.
- Train managers on the new legal requirements.
Preparing early can help minimise disruption once the legislation comes into force.
Current Status
The Government’s consultation on these proposals is due to close on 25 August. Following the consultation, further details are expected on:
- The amount of compensation employers will need to pay.
- What will count as reasonable notice.
- The specific circumstances where compensation will not be required.
- When the final legislation will come into force.
While many of the finer details are still to be confirmed, employers should begin reviewing their current scheduling practices now to ensure they are well prepared.
What Happens if Employers Don’t Comply?
Although the final enforcement provisions are still being confirmed, employers that fail to comply with the new requirements could face a number of consequences.
Workers may be able to bring claims to an Employment Tribunal if they believe they have been denied their statutory rights, such as payment for cancelled shifts or reasonable notice of working hours. Employers could also be ordered to compensate workers where they have failed to meet their legal obligations.
Beyond the legal risks, non-compliance can damage employee morale and make it more difficult to attract and retain staff. Workers who feel their time is not respected are more likely to seek employment elsewhere, increasing recruitment costs and staff turnover.
Reviewing your contracts, scheduling practices and manager training before the changes come into force will help reduce risk and ensure your business is prepared.
How We Can Help
The Employment Rights Act 2025 changes represent one of the biggest updates to employment law in recent years. Keeping up with the changes can be challenging, particularly for businesses managing shift-based workforces.
At The HR Booth, we’re helping employers understand what the new legislation means in practice. From reviewing contracts and policies to training managers and updating working practices, we can help your business prepare with confidence.
If you’d like to discuss how these upcoming changes could affect your organisation, get in touch with our team. You can also download our Employment Rights Bill Roadmap on our website.
