Employers must be able to expand their workforce quickly to meet fluctuating demand, yet this flexibility must be carefully balanced against the legal obligation to provide workers with stability and fair treatment.
With the forthcoming Employment Rights Bill introducing new requirements around predictable working patterns, cancellation pay, and minimum notice periods, now is the ideal time for businesses, particularly those in warehousing and logistics, to review their staffing models and ensure they remain compliant with evolving employment law.
Balancing the need for flexibility with offering workers enough certainty
Like many sectors that experience significant seasonal fluctuations in demand, warehousing operations often rely on zero hours or low hours contracts to cope with surges. Whilst zero hours contracts are popular with individuals who do not wish to commit to a minimum working pattern, employee representative bodies and Trade Unions have criticised the use of zero hours contracts, alleging that they are an abuse of power, placing low-income workers in a vulnerable situation without job security or guaranteed income.
A ban on exclusivity in zero hours contracts was introduced in 2015 to ensure that zero hours workers could refuse offers of work to provide them with the flexibility of choosing from multiple offers to offset the insecurity of these arrangements.
The nature of zero hours arrangements is uncertain, however, good practice includes:
- Ensuring managers are appropriately trained to understand their obligations to zero hours workers,
- Providing reasonable notice of offers of shift work and avoiding inappropriate practices such as late cancellations of shift offers
- Contracts, policies and practices that are clear, compliant and up to date.
To offer certainty, some employers are offering minimum guaranteed hours or regular shift patterns where possible and communicating openly about scheduling and cancellation policies. This approach not only supports compliance but also helps build trust and engagement among staff during busy periods.
Avoiding Legal Pitfalls in Zero-Hour and Flexible Contracts
Zero-hour and flexible contracts remain lawful tools, but they are frequently misapplied.
Common pitfalls include:
Misclassifying status
It is important to correctly identify the legal relationship (and importantly, the contract) you are creating, whether self-employed, worker or employee.
This should be regularly monitored to ensure that the contract genuinely and accurately identifies the reality of the relationship to avoid status and back pay claims. Classifying an individual as self employed whilst requiring them to provide a personal service and seeking to control their working practices often leads to worker or employment status (and associated back pay) claims.
Relying on outdated contract templates and failing to track working patterns
These errors can lead to complex disputes and claims, including holiday and other payments claims. Employers should regularly review their contracts and ensure that working practices align with the terms set out, reducing the risk of costly disputes.
How might upcoming changes in the Employment Bill reshape employers’ obligations?
The Employment Rights Bill will introduce reforms that directly affect staffing models in warehousing and beyond. The Government’s proposals under the Employment Rights Bill include ensuring that after a period of 12 weeks, workers will have a right to a contract that reflects the actual number of hours that they regularly work.
One of the Government ERB proposals currently under challenge by the House of Lords is the inclusion of a recurring positive obligation for employers to make guaranteed hours contract offers every 12 weeks to a qualifying zero-hours worker.
In addition, the ERB sets out proposals for providing notice or compensation for changed, cancelled or curtailed shifts. Cancellation pay will become mandatory when shifts are withdrawn at short notice, and minimum notice periods for scheduling will be introduced. These changes are designed to reduce uncertainty for workers while still allowing businesses to manage genuine fluctuations in demand. Employers should begin preparing now by reviewing scheduling practices and updating policies. The proposals are detailed and complex and will require secondary legislation.
Consultation will commence following the bill receiving Royal Ascent. According to the Government’s ‘road map to implementation’, the provisions are planned to be introduced in 2027. However, whether this is feasible given ongoing ‘ping pong’ of the bill remains to be seen.
When are zero-hour contracts an appropriate tool?
Zero-hour contracts are most suitable where work is genuinely irregular, such as covering sickness or unexpected surges, and where workers actively prefer flexibility. However, for roles involving regular or ongoing hours, fixed-term or part-time contracts are more likely to reflect the accurate legal and contractual position. Over-reliance on zero-hour arrangements can give rise to disputes and expose employers to legal challenges, making it essential to match contract type to the reality of the role.
What steps should employers take to ensure contracts remain compliant?
Employers should take proactive steps to ensure compliance and fairness.
This includes auditing the workforce to identify and review:
- how many individuals are engaged on zero hours contracts:
- status and contract types of those individuals and whether they reflect actual working patterns and relationship;
- when seasonal fluctuations occur and whether fixed term contracts might be a more appropriate option;
- whether shift patterns and systems to manage shifts comply with the new proposals and if not, to plan for the introduction of new compliance systems ahead of the introduction of the reforms;
- audit holiday payment processes and calculations to ensure compliance.
- Updating contracts to reflect both current law and plan necessary changes to comply with the changes under the Employment Rights Bill.
- Training managers to handle requests for predictable work appropriately.
- Holiday pay must be calculated correctly.
- Practices should be monitored to risk assess to avoid indirect discrimination against groups such as parents or disabled workers. Embedding fairness into flexible staffing models will help employers maintain agility during seasonal peaks while staying firmly aligned with evolving employment law.
The warehousing sector thrives on its ability to adapt quickly to demand, but flexibility must be structured carefully to remain compliant.
By anticipating the changes in the Employment Rights Bill and embedding fair practices into staffing models, employers can protect themselves legally, strengthen workforce trust, and ensure they are well-prepared for the challenges of seasonal peaks.
Speak to our employment solicitors
We understand that maintaining workforce agility must never come at the expense of legal compliance or fair treatment.
Our Employment Law team advises warehousing, logistics, and other seasonal sectors on structuring contracts that are both flexible and future-proof.
With legislative change on the horizon, now is the time to audit your staffing practices, train your managers, and ensure your contracts are robust, compliant, and commercially sound. If you’d like to explore tailored strategies to protect your business and your people, get in touch with our specialist team today.
Key Contact
Claire Brook
Employment Law Partner
Claire advises a wide range of employers on all aspects of employment law, from recruitment and employment, through to complex dismissals and representation at employment tribunals.
