Replace zero-hours with guaranteed hours

Affected workers

The official ERA analysis cites about 2.4 million variable-hours workers affected by guaranteed-hours measures.

• Official business cost is material.
• Fiscal cost is mainly public exposure.
• Flexibility loss is the bigger economic risk.

Core trade-offs

Variable-hours workers gain income security. Employers lose scheduling flexibility. In variable-demand sectors, fewer casual shifts and lower marginal hiring should be expected.

• Workers gain predictable hours.
• Employers lose flexibility.
• Casual hiring likely falls.

Illustrative fiscal impact

+GBP 0.2bn to +GBP 3.0bn. Central estimate: +GBP 0.8bn.

• Positive numbers mean public-finance pressure; negative numbers mean Exchequer savings.
• Gross costs are separated from tax, NI and benefit offsets.
• Private business costs are not automatically fiscal costs.
• Behavioural responses widen the range materially.
• This is not an official costing.

Economic impact by 2027-28

• Jobs: Likely fewer marginal casual shifts and some lower hiring in variable-demand sectors.
• Wages: Income volatility falls for workers receiving guaranteed hours.
• Prices: Hospitality, care and retail may pass scheduling costs into prices.
• GDP / productivity: Likely negative short run if flexibility loss exceeds planning gains.

Assessment

Guaranteed hours improve security for variable-hours workers but reduce employer flexibility. The policy should be assessed as a labour-cost and scheduling constraint, not as a free administrative change.

Confidence: Medium-low. Official costings exist, but a stronger ban would exceed them.

Main risks

• Hours rationing: Employers may offer fewer shifts or avoid regular patterns.
• Small-firm exposure: Demand volatility is harder for small firms to absorb.
• Enforcement burden: Workers need fast remedies for cancelled shifts and avoidance.

Safeguards

• Phase by regularity threshold.
• Monitor shifts, not just jobs.
• Use fast low-cost enforcement.

Academic evidence

UK government evidence

Sources

• PolicyLens illustrative scenario methodology for replace zero-hours with guaranteed hours Internal - PolicyLens, 2026
• Employment Rights Act 2025 - Economic Analysis UK government report - Department for Business and Trade, 2026
• Employment Rights Act 2025 impact assessments Impact assessment collection - Department for Business and Trade, 2026
• Tribunal Statistics Quarterly: October to December 2025 Official statistics - Ministry of Justice, 2026
• Does Employment Protection Reduce Productivity? Academic article - Autor, Kerr and Kugler, Economic Journal, 2007
• Labor Market Institutions and the Distribution of Wages, 1973-1992 Academic article - DiNardo, Fortin and Lemieux, Econometrica, 1996
• Workers' Charter 2026 Party policy source - Green Party of England and Wales, 2026

Other Green policies

• Raise the minimum wage to £15
• Index public-sector pay to inflation
• Add public-pay restoration premiums
• Raise low-paid public-sector wages
• Cap organisation pay ratios at 10:1
• Protect pay in transition schemes
• Create a single worker status
• Equal terms for outsourced workers