Hospitality anxiously awaits the government’s decision on guaranteed hours

A major staffing shakeup is coming to hospitality businesses, and operators are still in the dark about what it actually will mean for them. 

The government’s consultation on guaranteed hours – part of the wider Employment Rights Act 2025 – closed on the 25th of August. In a nutshell, it sets out to give workers on zero-hour and low-hour contracts the right to be given a contract reflecting how many hours they work. 

While these reforms aren’t banning zero-hours entirely, they could still pose a real headache for hospitality businesses, which lean on flexible staffing more than almost any other sector. 

As we wait on ministers to publish their response, we asked hospitality operators, employment law experts, and trade bodies what changes are actually on the table and how the sector is likely to react to the reforms.

 Guaranteed hours overhaul: what’s actually changing?

Workers on zero-hours or low-hours contracts would get the right to be offered guaranteed hours reflecting what they actually work, the right to reasonable notice ahead of shifts, and the right to compensation when a shift is canceled or moved last minute. 

Speaking to Startups.co.uk, employment lawyer Patrick Macken of Richard Nelson LLP said that while the mechanics of the changes are still being thrashed out, the government wants to set the reference period at 12 weeks – in line with how average pay is already calculated under existing employment law – with eligibility criteria likely to land somewhere between 8 and 20 hours per week.

Crucially, this isn’t the death of zero-hours contracts. Workers can still choose to stay on one if it suits them. But for hospitality, where trade can swing from dead quiet to slammed in a single shift, even a “soft” version of guaranteed hours would be a drastic change. 

Yet, with the consultation closing on the 25th of August and changes expected to come into force sometime in 2027, businesses do have a little breathing room to prepare before the rules bite.

Experts back the principle, but say they won’t work for hospitality

After speaking to trade bodies and industry experts across hospitality, one thing was clear: no one is defending exploitative zero-hours practices.  

Rita Kastrati, co-founder and CEO of recruitment and gig-platform Pioneering People, tells us, “I support the principle behind the proposals. Nobody should remain on a zero-hours contract while consistently working what is effectively a regular job.” 

Steve Hesketh, CEO of the hospitality consultancy and management firm Savvy Collective, agrees: “Nobody in hospitality is against fair treatment for staff, and most of us moved away from harsh zero-hours practices years ago anyway.”   

However, when it comes down to the details, operators agree it’s a design problem, not a values problem. The issue isn’t whether staff deserve security – it’s whether a 12-week window can capture an industry that barely runs to a predictable calendar at all. 

“A 12-week reference period is workable in theory, but hospitality doesn’t run in neat 12-week blocks. We have a quiet January, a manic Christmas, a beer garden that only fills when the sun’s out. Average those hours and you either lock in shifts or set the threshold so low it changes nothing in practice,” Hesketh continued.

Hospitality is highly seasonal, so a short reference period could mistake a temporary peak for a permanent staffing requirement. This may make businesses more cautious about offering extra shifts, unintentionally reducing opportunities for workers.

Rita Kastrati Founder of Pioneering People

Greater flexibility is needed, or sasonal roles pay the price

The solution? John-Paul Mcaughey, the co-founder of Schooners bar in Birmingham, believes the answer lies in a longer reference period.

“Any reference period would need to be over 52 weeks to adjust for seasonality. I’m not sure how they gain the right to give people guaranteed hours, as everything in hospitality is done on an individual, case-by-case basis.”

Trade bodies representing the sector echo the same concern at scale. A spokesperson from the Night Time Industries Association (NTIA), a trade body that supports the UK’s night-time economy, told Startups: “Our concern is ensuring that the legislation distinguishes between exploitative employment practices and the legitimate flexibility that is fundamental to hospitality, nightlife and events.”

Whatever time period ministers settle on, the message from operators is consistent. Applying a nine-to-five framework to hospitality just won’t work, and it risks punishing the seasonal, flexible roles the sector depends on to survive.

What guaranteed hours could actually cost hospitality, and the wider economy

For hospitality owners, it all comes down to one question: what will this actually cost me?

Graeme Donnelly, CEO and founder of 1st Formations, points to the government’s own figures: “The government’s latest analysis suggests the wider reforms could cost businesses between £350 million and £2.9 billion a year, depending on how the final rules are implemented. Compensation for shifts cancelled, moved, or cut short at short notice could account for up to £1.2 billion of this total.” 

“There is also a wider concern that reducing labour market flexibility could have unintended consequences for employment,” he continues, pointing to examples in Spain and Italy where similar labour market restrictions led to higher rates of youth unemployment. 

Startup columnist and founder of Planet of the Grapes, Matt Harris, warns smaller businesses will be hit twice as hard. “When part-time or seasonal staff take sick leave, you’re paying them statutory pay while simultaneously paying a replacement worker to cover the shift.”

“Small venues simply don’t have the cash reserves to absorb that kind of double-dipping compliance overhead without cutting back elsewhere,” he continues. 

However, Savvy Collective’s Pete Hesketh argues that the real burden is the time, not money. “The bigger cost, though, is admin,” he tells us.

Tracking actual hours worked, calculating fair offers, giving proper shift notice, and handling cancellation payments all land on an owner who’s usually also on the floor most nights pulling pints or expediting food.

Pete Hesketh CEO of Savvy Collective

Taken together, these voices from across the sector suggest the real question isn’t whether the new rules will cost hospitality, but how operators plan to absorb it. 

What can hospitality businesses do to prepare for the changes?

With regulations still to be published, operators can’t yet make final decisions – but there’s plenty they can do in the meantime.

Donnelly’s advice is to start with the numbers: review rotas, payroll records and timesheets now to understand who might already qualify for guaranteed hours under the proposed thresholds, and invest in proper time-tracking software if you don’t already have it. 

He also suggests simply asking staff what they want, since not everyone will welcome a guaranteed-hours offer. Some value the flexibility of zero hours too much to give it up. 

Rebecca Stevenson, co-founder of East London cafe Signorelli, has more of a structural suggestion: rather than guaranteeing a precise weekly figure, she’d like to see businesses able to offer contractual hour “bands” – say 16–24, 30–40 and 40-plus hours – giving staff visibility over likely earnings while preserving room to flex.

For Matt Harris, preparation looks more like damage control. He tells us he’ll have no choice but to run a leaner core team, relying more on cross-training staff to cover multiple roles rather than hiring extra hands. “When the government forces fixed costs on a fluctuating industry,” he says, “the only way to adapt is to shrink your risk.” 

With the final rules still months away, the details remain far from settled. But one thing is already clear: the operators getting ahead of it now are the ones least likely to be caught out when they land.