Under the right to guaranteed hours set out in clause 1 of the Employment Rights Bill an employer will have to make an offer to a worker of guaranteed hours based on some assessment of the hours that the worker has actually worked over the course of a reference period. We don’t yet know who this will apply to, what pattern of work will be required to trigger the offer or how the offer will have to reflect the hours that have been worked. All of those matters are left to later Regulations. But we can say that some sort of offer will have to be made based on the work done over the reference period. 

But what if the reference period is a not a typical period of work? What if it coincides with a busy time where lots of hours are available and the period following the reference period will not be so busy? How is the employer to honour the commitment to the guaranteed hours if those hours are no longer available? 

Take an outdoor catering business. Perhaps the owner has a number of street food vans that can attend sporting events and festivals. In May to September there is something on almost every day and the crowds are huge. Their workers are offered almost as many hours as they would like to work. Then in late September the weather breaks and the work tails off. There are no more summer parties and just a few events per week. No-one needs to be made redundant – the need for employees is the same, but there are fewer hours available. Would the employer still be obliged to make an offer of guaranteed hours based on the hours worked over the busy period or would there be some way of taking the variable nature of the business into account? 

The issue arose in the House of Lords during the latest committee stage debate on the Bill. Lords from the Conservative and Liberal Democrat side worried that employers would be locked into an unsustainable pattern of work. 

Speaking from the back benches, Labour peer Lord Hendy KC (an absolute Titan of UK employment law) made a rather surprising point. He said:

First, the noble Lord, Lord Hunt, suggested that employers would get locked into guaranteed hours. I remind him that all contracts of employment may be varied by mutual agreement or, if not, they can be terminated and there can be re-engagement on fresh terms. (Hansard 8 May 2025, Col 1707)

I mean that is true – currently. But the Bill also makes it automatically unfair to dismiss people and then reengage them on fresh terms. So that particular avenue will be closed off if the workers involved are employees and have the right not to be unfairly dismissed.

Using temporary contracts

Speaking for the Government Baroness Jones of Whitchurch concentrated on the use of limited term contracts to address the issue. She said: 

 Under the guaranteed-hours provisions, it is reasonable for an employer to enter into a limited-term contract with a worker if the worker is needed only to perform a specific task and the contract would terminate after that task has been performed—for example, waiting at tables at a wedding—or the worker is needed only until an event occurs or fails to occur, after which the contract would terminate. This could include a worker covering another worker who is on sick leave or a worker needed only for some other kind of temporary need that would be specified in regulations, the contract expiring in line with the end of that temporary need…

We are aware of fluctuations in demand for seasonal workers, and we will take this into account when designing the regulations on the definition of temporary need. This is a novel right and, by defining temporary need in regulations, we will be able to react dynamically to changing employers’ practices and respond to circumstances where employers identify genuine temporary needs that are not covered by a specific task or the occurrence of an event. (Hansard 8 May 20205, Col 1711) 

The reference to ‘temporary need’ here is in relation to the new S.27BB of the Employment Rights Act 1996 that the Bill introduces. It sets out a number of requirements in relation to the guaranteed hours offer that an employer must make when a qualifying worker has worked in excess of their existing guaranteed hours over the course of a reference period. The section provides that the guaranteed hours offer must propose the removal of any term providing for the contract to terminate ‘by virtue of a limiting event’ (for example, after a period of time or when someone returns from maternity leave). 

This stops the employer getting around the new right by making a guaranteed hours offer but including a term that limits the new contract to a temporary period. There is an exception however if, on the day the guaranteed hours offer is made, it would be reasonable for the contract to be entered into as a limited-term contract. One circumstance in which this would be reasonable is where the employer reasonably believes that there is only a temporary need ‘of a specified description’ for the worker to do work under the contract. It is here that Baroness Jones sees the Government stepping in with Regulations to provide that ‘temporary need’ will include work subject to seasonal variations in demand. 

I am not sure we need Regulations to tell us what temporary need means, but that’s a side issue. The point is that an employer will be allowed to hire seasonal workers on temporary contracts which will not be made permanent by the obligation to make an offer of guaranteed hours. 

All of which is fine – but rather misses the point. What if the employer does not have a temporary need for workers but a continuing need for workers whose hours will vary with customer demand? Our catering business does not want to engage people on three-month contracts over the summer and then make them redundant. It wants to continue employing them for the whole year and give them some extra hours in the summer. Will that still be legal when the provisions on guaranteed hours are brought into force? 

It is difficult to say at the moment because we still don’t know who the new rules will apply to – how many hours a week do you need to be guaranteed in order to be outside this regime? I wrote about this issue last year and we still don’t have an answer. But unless the threshold is set so low that trade unions will be absolutely up in arms, I don’t see how the Government can square this circle through Regulations. Employers will simply have to recruit additional temporary staff for busy periods rather than give extra work to existing employees. They could perhaps offer additional temporary contracts to existing staff so that they are employed under two separate contracts to do the same work – but with the temporary contract covering the additional hours. But I can’t see our owner of street food vans being keen on that solution. 

Dodging the right altogether

Another way might be to avoid the obligation altogether by agreeing additional guaranteed hours during busy times of the year. This would work by regularly updating the contract so that it guaranteed as many hours as were likely to be available in the coming weeks or months. So someone who is generally employed on a zero hours contract could during a busy period be offered a contract that guarantees a certain amount of hours during that period. At the end of that period the hours would automatically return to normal. The guaranteed hours offer is only required where the worker works in excess of the hours guaranteed by the contract. So if the employer were to offer a variation in contract that increased the hours that were guaranteed between May and September before reverting to a zero hours arrangement thereafter then the right would not apply. During the busy period the workers hours would not exceed their guaranteed hours. 

I think that is an ingenious solution (though I say so myself). But it is generally not a good idea for the Government to introduce legislation that requires people to come up with ingenious solutions. It also seems unlikely that the average owner of an outside catering business is going to be well placed to arrange a regular amendment to contractual terms to suit the fluctuating needs of the business. I am also not sure what the average worker in a business like that would make of regular requests to vary the contract on a temporary basis. But it’s the best I can do with the materials available.

Not worth the effort?

Let’s not beat about the bush. The right to guaranteed hours under the Employment Rights Bill is an absolute nightmare. It’s provisions are just too complex and will not work. I am not allergic to complexity – it has its place in employment law – but on this issue we need something much more simple and straightforward. The new right is aimed at protecting some of the most vulnerable and low paid workers in the country who often have no workplace representation. They need to understand what their rights are and have an effective means of enforcing them. Any Tribunal claim arising from a breach of this right is likely to be low value – we may be talking about a zero hours worker who should have been guaranteed 8 hours a week at not much more than the minimum wage. Claimants will not be in a position to hire lawyers to help them make sense of the complexities of the law. Even if a large number of employees brought a multiple claim, each one would still vary on its facts with each worker being covered by a different reference period and being entitled to an individual offer based on the hours they happened to work. This will not be like those large-scale claims involving equal pay where everyone’s case is essentially the same. 

Any cases that are brought will then go before some poor overworked Employment Judge who will have to hear them on the same day as a bunch of cases on holiday pay or deductions from wages and will have to try to help unrepresented parties make sense of 20 pages of statute and God knows how many pages of regulations. I have sympathy for those judges – but what about th parties? How long will it take for a vulnerable worker to go from the day when they should have been offered a contract to the day when a Tribunal awards them whatever multiple of a week’s pay is eventually decided upon as the remedy? Who would consider all of that to be worth the effort? This is an absurd way of addressing the genuine problem of insecure work. If it ever comes into force (and I have my doubts) it is likely to be more honoured in the breach than the observance.