Government sets timetable for ‘ending’ zero hours contracts and tightening tipping laws

The timeline, unveiled today (1 July), also confirms that plans to tighten the law on tipping by mandating consultation with workers to ensure fairer tip allocation will come into force in October 2026, with a ban on fire and rehire practices being introduced at the same time.

Alongside ending what the Government describes as ‘the exploitative use’ of zero hours contracts in 2027, the roadmap also promises to bring in rights to guaranteed hours for workers, strengthen existing rights to request flexible working and changes to an employees’ right to claim unfair dismissal at the same time.

Responding to the announcement, trade body UKHospitality welcomed the Government’s clarity over when it will implement its plans, but warned that concerns remain over cost implications to businesses.

“Clear and precise timelines on when aspects of this legislation, and the processes to deliver them, will come into force is essential, and it was important that the Government embark on providing clarity,” says Kate Nicholls, chair of UKHospitality.

“There are substantial and expensive changes for businesses in the Employment Rights Bill and it’s right that the Government is using the appropriate implementation periods for the most complex issues for hospitality, in order to get the details right for both businesses and workers.

“We have been clear with the Government that the changes regarding guaranteed hours and predictability of shifts will be the most complex for hospitality businesses, and therefore necessitates a significant implementation period.

“It’s important that it has acted on our concerns and it must now use this time to work with businesses on an appropriate policy framework and clear guidance.”

First announced in July last year, the new Employment Rights Bill has been described by the Government as being ‘the biggest upgrade to workers’ rights in a generation’.

It was originally planned that zero hours contracts would be banned outright under the legislation.

However, while the bill will end zero hours contracts in their current form by giving employees the right to a guaranteed hours contract, if they want it, access to zero hours contracts will be maintained for staff who request them; something UKHospitality campaigned to secure.

The Government adds that further consultations with employers, workers and trade unions regarding the legislation are planned from this year into next.  

 “Since the beginning, we have been working with businesses big and small to ensure this bill works for them, and this roadmap will now give them the clarity and certainty they need to plan, invest and grow,” says Jonathan Reynolds, Business Secretary.    

“By phasing implementation, our collaborative approach balances meaningful worker protections with the practical realities of running a successful business, creating more productive workplaces where both employees and employers can thrive.”

The Government will produce guidance to help organisations navigate the changes, which will be made available in advance of implementation deadlines.