A record 1.23 million UK workers are now on zero-hour contracts, with health and social care ranking as the second-highest sector at 16.1% of the workforce employed without guaranteed hours. 

This reliance on flexible staffing has allowed care providers to manage fluctuating demand and control costs, but the Employment Rights Act 2025 fundamentally changes how zero-hour contracts can operate from 2027 onwards, forcing providers to rethink workforce strategies that have worked for years.

The Act received Royal Assent in December 2025 and introduces staged implementation throughout 2026 and 2027, giving providers limited time to prepare for changes that will affect rota management, labour costs, and contractual obligations.

The legislation doesn’t ban zero-hour contracts entirely but restricts exploitative practices by requiring guaranteed hours based on working patterns, reasonable shift notice, and compensation for cancelled shifts.

For care providers accustomed to calling staff at short notice or adjusting rotas based on occupancy fluctuations, these changes represent more than regulatory compliance but a fundamental shift in how workforce planning must operate when flexibility carries financial costs and contractual obligations you can’t simply ignore. 

Understanding how zero-hour contract reforms affect different care service models helps providers prepare strategically rather than reacting when enforcement begins.

What’s Actually Changing From 2027

The core changes affect three areas that care providers have historically managed flexibly without legal constraints beyond basic employment rights.

Workers will gain the right to request guaranteed hours based on their actual working patterns over a reference period, likely around 12 weeks. If someone consistently works 25 hours weekly despite being on a zero-hour contract, they can request a contract reflecting those hours. 

Providers must consider requests seriously and can only refuse on legitimate business grounds that tribunals will scrutinize if challenged.

Shift notice requirements will demand reasonable advance warning when offering work, with compensation payable if shifts are cancelled without adequate notice. Current practice where 59% of variable-hours workers receive less than a week’s notice and 13% get under 24 hours becomes legally problematic when workers can claim compensation for late cancellations that disrupt their income and planning.

Protection from unfair dismissal arrives after six months rather than two years for employees, including those on zero-hour arrangements where employment status has evolved through consistent work patterns.

This dramatically shortens the period before dismissal claims become possible, making early performance management and documentation essential rather than optional.

Why Care Providers Are Particularly Affected

The care sector’s operational model has relied heavily on zero-hour flexibility because demand varies with occupancy levels, sickness, annual leave, and individual service user needs that change unpredictably. 

Calling staff at short notice to cover gaps has been standard practice that the new rules make financially expensive and legally risky.

Many care workers on zero-hour contracts have developed regular working patterns through repeated shifts that providers offer week after week, creating de facto employment relationships that written contracts don’t reflect. When the legislation takes effect, these patterns trigger guaranteed hours obligations regardless of what contracts currently say.

Financial margins in social care are already tight, and adding guaranteed hours or shift cancellation compensation increases labour costs without corresponding fee increases from commissioners. 

A domiciliary care provider paying compensation for cancelled visits when service users are admitted to hospital, or a residential home guaranteeing hours to bank staff who previously worked flexibly, faces cost increases that existing budgets don’t accommodate.

Staff retention might actually improve when workers gain income predictability, but the transition period creates uncertainty about whether your current workforce model remains viable or requires fundamental restructuring before legal changes force reactive responses. Real examples of how providers are preparing for zero-hour contract reforms are in our client case studies showing workforce planning approaches.

What Workforce Planning Actually Means

Preparing for 2027 implementation requires auditing current practices during 2026 whilst you still have time for strategic adjustments rather than emergency responses when enforcement begins.

Review who’s actually on zero-hour contracts and what their working patterns look like over the past 12 weeks. You may discover that many staff already work regular hours that will trigger guaranteed hours requests once the legislation takes effect, meaning you’re already operating closer to employment relationships than your contracts suggest.

Track shift patterns systematically rather than managing rotas week-by-week without monitoring whether patterns are creating contractual expectations. Your scheduling data determines legal obligations under the new rules, so understanding patterns now helps you make informed decisions about workforce structure before it’s legally imposed.

Calculate what guaranteed hours and cancellation compensation will actually cost based on your typical rota fluctuations and cancellation rates. Many providers haven’t done this math and will be shocked when costs materialize, so early calculation allows budgeting or operational changes to absorb costs without crisis.

Consider whether some zero-hour workers should move to part-time contracts now rather than waiting for guaranteed hours requests you’ll struggle refusing. Proactively offering contracts reflecting actual working patterns builds goodwill and avoids the legal complexity of refusing requests that tribunals might view as unreasonable.

Train managers on new obligations because line managers making rota decisions become legally significant decision-makers whose shift offers, cancellations, and pattern management create the contractual expectations that trigger guaranteed hours rights. Insights from providers preparing for workforce changes are shared in our client testimonials about operational planning.

The 2026 Preparation Window

This year represents your opportunity to adapt strategically rather than reactively. Providers waiting until 2027 to address zero-hour contract changes will face simultaneous legal compliance pressure, workforce disruption, and cost increases without time for gradual adjustment.

Early preparation allows testing different workforce models, renegotiating commissioner fees to reflect increased costs, restructuring rotas to minimize cancellations that now carry financial penalties, and moving appropriate workers to guaranteed hours contracts before it’s legally mandated under less favourable conditions.

Structured workforce planning helps identify where flexibility remains viable and where guaranteed hours make more operational and financial sense. Resources like our free bid readiness checklist can help providers assess workforce planning alongside other operational priorities.

The Uncomfortable Reality

Zero-hour contracts will still exist after 2027, but they’ll operate under constraints that make the flexibility care providers have relied on more expensive and legally complex than current practice allows.

Providers assuming they can continue business as usual will discover that workforce planning built around unrestricted flexibility doesn’t survive legislation designed specifically to restrict it.

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