Britain’s flagship overhaul of zero-hours contracts could end up doing the very opposite of what ministers intend, the country’s leading HR body has warned, with employers likely to lean more heavily on self-employed contractors and fixed-term arrangements if the new rules prove too unwieldy to administer.
Responding to the Government’s consultation on its zero-hours contract reforms, a central plank of the Employment Rights Bill that recently cleared its final parliamentary hurdle, the Chartered Institute of Personnel and Development (CIPD) cautioned that complex compliance demands could ultimately push more workers into looser, less secure forms of employment.
Ben Willmott, head of public policy at the CIPD, said that while the institute supported the principle of protecting workers from one-sided flexibility, the practical detail of the reforms would make or break their success.
“Well-managed zero-hours contracts provide welcome flexibility for employers and for people who want to work but cannot commit to fixed hours, including students, carers and those managing health conditions,” Willmott said.
He stressed that the reference period used to calculate the guaranteed minimum hours owed to a zero-hours worker would be a critical battleground. “A longer reference period will be easier for employers to manage, but even with this, the new measures are likely to be extremely complex and challenging to comply with, particularly for small firms or those with fluctuations in demand.”
According to the Government’s own factsheet on zero-hours contracts, the reference window is expected to be set at around 12 weeks, although the figure remains subject to consultation. Employer groups have been pressing for a longer horizon to smooth out the seasonal peaks and troughs that characterise sectors such as hospitality, retail and care.
Beyond the question of guaranteed hours, Willmott pointed to a second compliance landmine: the requirement to give workers reasonable advance notice of shifts.
“This is only one headache for employers,” he said. “The challenge of providing reasonable advanced notice of shifts is also likely to prove difficult and require caveats to allow for issues like sickness absence.”
The concern echoes wider business worries that the legislation, while well-intentioned, has been drafted with limited regard for the operational realities of running a small or medium-sized firm — anxieties that have already prompted a third of employers to scale back hiring plans according to fresh CIPD research.
Willmott’s sharpest warning, however, was reserved for the law of unintended consequences. If the final regulations prove unworkable, he argued, employers will simply route around them.
“If the final regulations are too difficult to manage, employers will simply find other ways to achieve workforce flexibility. They are likely to rely more on self-employed contractors and fixed-term contracts, for example, potentially resulting in more rather than less insecure employment.”
That outcome would be particularly damaging for young people, who have historically been one of the biggest beneficiaries of zero-hours arrangements. Such contracts have long allowed students and early-career workers to fit paid work around studies, training or caring duties.
“This would also damage opportunities for young people who particularly benefit from zero-hours contract arrangements because they enable them to balance work while studying,” Willmott added.
The CIPD is among a growing chorus of business voices, covered in detail in Business Matters’ guide to the new Employment Rights Bill, calling on ministers to use the consultation process to soften rough edges rather than rush implementation. With staged commencement now stretching into 2027, Whitehall has time to listen. Whether it does so will determine if the reforms become a landmark for fairer work, or a cautionary tale of policy that achieved precisely the opposite of its aim.
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Zero-hours contract reforms risk pushing bosses towards more insecure work, warns CIPD