扒哥吃瓜

Lead department: Department for Business, Innovation, Science and Trade

Summary of proposal: to consult on the implementation of the statutory right to reasonable notice of shifts for eligible workers, including agency workers, with the presumption of reasonable notice and an hours threshold for eligibility.

Submission type: options assessment

Legislation type: secondary

RPC reference: RPC-DBT-26158-OA(1)

Date of issue: 13 July 2026

RPC opinion rating

As originally submitted the OA was not fit for purpose. The department has now expanded the options longlist and justification for shortlisted options, improved discussion of operational need, enforcement and unintended consequences, and provided a clearer explanation of how the options target the identified problem.

Final impact assessment submission required

Under the Better Regulation Framework (page 40) independent scrutiny of final impact assessments (IAs) is required for measures with very high anticipated impacts to assure ministers and Parliament of the robustness of the analysis for such large measures.

Specifically, final-stage RPC scrutiny is needed for any regulatory provision with an equivalent annual net direct cost to business (EANDCB) of 卤拢100 million or more and where at least one of the following conditions is met:

a) the RPC opinion of the scorecard elements of the options assessment (OA) received a weak or very weak rating

b) the RPC opinion of the monitoring and evaluation plans in the OA received a weak or very weak rating

c) the measure falls within an exclusion category (apart from the building safety exclusion) and has therefore not previously been subject to OA scrutiny

This OA covers a proposal with an EANDCB of 卤拢100 million or more and meets condition a). It will therefore require resubmission at final IA stage. This OA is still considered fit for purpose, and the department has provided sufficient quality evidence and analysis in the green-rated areas.

RPC opinion summary

Rationale: Green

The OA sets out a clear problem, supported by good evidence on labour market imbalance, short notice shift scheduling, worker insecurity and productivity effects. The department should improve its objectives to a SMART format, so they are measurable and time-bound. The final IA should identify and evidence where employer market power in the labour market and lack of outside options for workers are material, and to what extent, rather than assuming they apply uniformly.

Identification of options: Green

The department has now strengthened the longlist, and improved justification for shortlisted options. The final IA should explain how consultation evidence informs selection of final parameters, and set out the mitigation package for small and micro businesses, explaining why any residual disproportionate burden is justified.

Justification for preferred way forward: Green

The OA does not name a preferred option as the department is consulting. It provides a range based assessment of impacts, uncertainty, risks and trade-offs. The final IA should appraise the selected parameters against the alternatives, explain interactions with the guaranteed-hours and cancellation-payment measures, and show which costs are genuinely incremental.

Regulatory scorecard: Weak

The OA estimates a Net Present Social Value range of -拢10 billion to -拢2 billion and Equivalent Annual Net Direct Cost to Business of 拢240 million to 拢1.2 billion. The OA does not sufficiently assess growth impacts, or whether the quantified costs capture only administration and planning burdens, while leaving the substantive economic cost of reduced scheduling flexibility largely unassessed. The final IA should assess employer behavioural responses, labour market risks, and impacts on productivity and growth, and distinguish administrative burdens from substantive compliance costs.

Monitoring and evaluation: Satisfactory

The OA provides a high-level plan, including a post implementation review commitment, stakeholder engagement, survey options and evaluation questions. The IA should identify owners, timings, baselines and named data sources more precisely, and where outcome targets are difficult to specify it should set out practical input- or output-based measures that can be used to assess whether the policy is working.

Summary of proposal

The government is proposing a package of measures to tackle one-sided flexibility, ensuring all jobs provide a baseline of security and predictability. This includes ending exploitative zero hours contracts. The package consists of 3 measures, with the highlighted second measure being the subject of this OA:

• a right to guaranteed hours, where the number of hours offered reflects the hours worked by a qualifying worker during a reference period
• a right to reasonable notice of shifts - this opinion addresses this measure
• a right to payment for shifts cancelled, curtailed, or moved at short notice

The government is consulting on the implementation of the statutory right to reasonable notice of shifts for eligible workers, including agency workers. The Employment Rights Act 2025 establishes the regulatory framework, with secondary legislation to set the detailed parameters.

The OA explains that the right is intended to give eligible workers greater predictability over when shifts will take place, while retaining appropriate flexibility where shorter notice may be reasonable in the circumstances. The consultation covers implementation choices including the presumption of reasonable notice, eligibility thresholds, factors affecting whether notice is reasonable, enforcement arrangements, agency-worker treatment and hirer liability.

The department has not selected a preferred option at this stage and is using consultation evidence, stakeholder views and commissioned research to inform the final IA and the policy parameters to be set out in regulations.

Response to Initial Review Notice

As originally submitted, the OA did not provide a sufficient identification and assessment of options, it also presented the policy as positive for growth. The RPC issued an Initial Review Notice because the option set was not sufficiently clear, targeted or developed to inform an effective consultation.

In response, the department has expanded the longlist and strengthened the justification for shortlisted options. The revised OA now better considers targeting, operational need, sector eligibility, enforcement, unintended consequences, factors affecting reasonable notice, agency-worker treatment and hirer liability. It provides a clearer explanation of how the consultation will test proportionality, coverage and avoidance risks.

The revised OA has still not properly addressed the issues the RPC highlighted around growth. The final IA still needs to assess the wider economic impacts of the policy, including effects on employer flexibility, labour market risks, productivity and growth.

Rationale

Problem under consideration

Short-notice scheduling creates insecurity for workers who need to plan income, childcare, travel, education and supplementary employment. The OA draws on Living Wage Foundation evidence that 73% of workers whose hours vary received less than two weeks鈥� notice of shifts in 2023, with 54% receiving less than one week. The OA also now draws on DBT-commissioned 2026 research, which finds that 63% of workers in insecure work receive less than two weeks鈥� advance notice and 40% receive less than one week. The OA explains that short-notice working can increase costs where workers cannot access cheaper transport or childcare arrangements.

The department notes one-sided flexibility arises where employers retain control over scheduling decisions while workers carry the income and planning risks. The OA links this to market power in the labour market, and information asymmetry, drawing on evidence from the Competition and Markets Authority, Living Wage Foundation, Work Foundation and academic literature. The final IA should not treat market power or information asymmetry as uniform across all affected work. It should explain how, and to what extent, workers鈥� outside options, employer bargaining power and information asymmetries vary by sector, location, business model and worker group, and how that evidence supports the final proposals.

Argument for intervention

The OA explains that the existing framework does not adequately address the imbalance between employers and workers, in sectors where short-notice scheduling is common. It states that non-legislative approaches would not provide enough incentive for employers to change behaviour, particularly where firms gain a commercial advantage by transferring risk to workers.

The department sets the proposal within earlier policy development, including the Taylor Review, Low Pay Commission and the Good Work Plan consultation on one sided flexibility in 2019. The OA explains the Act has already provided the legislative basis, so the OA focuses on implementation choices in secondary legislation.

Objectives and theory of change

The objectives are to increase security and stability for workers facing unpredictable hours, improve employment and financial security, promote two-sided flexibility, and better workforce planning. The OA does not define target levels for improved notice or implementation metrics.

The IA should convert the objectives into SMART terms, including baselines, measurable indicators and expected timeframes for assessing whether notice has improved. Where outcomes are difficult to specify, the department could use input- or output-based targets, such as the percentage of employers brought into compliance (above those already compliant), and the number of workers whose typical notice periods change because of the legislation.

The OA includes a developed theory of change setting out inputs, activities, outputs, outcomes, impacts and risks. The final IA should link this more explicitly to monitoring indicators and success criteria.

Identification of options

Identification of longlist

The OA states that the Employment Rights Act 2025 has established the regulatory framework, and remaining policy choices concern how the secondary legislation should implement it. It therefore longlists options for the presumption of reasonable notice, eligibility thresholds, factors affecting reasonable notice, enforcement arrangements, agency-worker treatment and hirer exemptions.

For agency workers, it includes shorter notice options and separate consideration of how the hours threshold and liability arrangements should apply. The department鈥檚 longlist now includes the following options:

• for directly engaged workers: a presumption of reasonable notice below one week, one week, 2 weeks, 3 weeks, 4 weeks, more than 4 weeks and 鈥渙ther鈥�
• for agency workers: the same one-to-4 week options, plus 5 days, less than 5 days and 鈥渙ther鈥�
• for factors affecting reasonable notice: consulting on specified factors, or using free-text questions to gather evidence on when shorter or longer notice may be reasonable
• for eligibility: zero-hours contracts or arrangements only, an hours threshold between 8 and 48 hours per week, an earnings threshold, sector eligibility, operational need and 鈥榦ther鈥�
• for enforcement: existing individual enforcement through ACAS and employment tribunals, or enforcement through the Fair Work Agency
• for hirer liability: consulting on a list of hirer exemptions, or using a free-text question on whether types of hirer should not be liable for failing to provide reasonable notice

The OA explains the rationale for these options, including that a period below one week may not materially improve predictability and that a period beyond 4 weeks could be impractical for employers with volatile demand.

Consideration of alternatives to regulation

The OA states that non-regulatory options were considered, but discarded because they would not achieve the intended outcomes. The department explains that guidance or voluntary action would be unlikely to have sufficient force where employers have a commercial incentive to retain one-sided flexibility. It explains that an outright ban on variable contracts would be poorly targeted because flexible work can benefit both workers and employers in some circumstances.

Justification for shortlisted options

For directly engaged workers, the OA discards notice periods below one week and above 4 weeks, while carrying forward one, 2, 3 and 4 weeks plus an 鈥渙ther鈥� option. The OA carries forward options that allow stakeholders to comment on a bounded range of implementation choices. For directly engaged workers, the one-to-4 week range is justified by current evidence on notice periods, international comparators and the Living Hours accreditation standard.

For agency workers, the inclusion of 5 days and less than 5 days reflects evidence that agency work is often used for short-term vacancies and that many agency workers currently receive very little notice of assignments.

The OA explains that an earnings threshold was rejected because it would be complex and not target workers with limited guaranteed hours. The department carries forward an hours-threshold range from 8 to 48 hours per week. It explains that the lower end reduces avoidance risks by making it harder for employers to move zero-hours workers onto very low guaranteed-hours contracts to avoid the right. The range is intended to test how coverage, targeting, proportionality and avoidance risks vary across thresholds.

The OA recognises that the evidence of one sided flexibility is strongest at the lower end of the range, and higher thresholds are included to test whether workers with more substantial guaranteed hours may still experience unpredictability in the timing of work.

The OA estimates that the threshold options would capture between 3.3 million employee jobs at an 8-hour threshold and 28.6 million employee jobs at a 48-hour threshold.

The OA explains why sector eligibility and operational need were discarded as eligibility mechanisms. Sector eligibility was rejected because it is difficult to define and enforce, and excludes workers facing one-sided flexibility outside the sectors identified. Operational need was discarded because the OA states that operational circumstances are better addressed through whether notice is reasonable in the circumstances, rather than by excluding employers or circumstances from scope.

Small and micro business assessment

The OA includes an assessment of small business impacts. It credibly states that small and micro businesses are likely to be disproportionately affected because they may lack dedicated HR functions, have weaker financial resilience and rely more on flexible scheduling to manage demand.

The OA cites evidence that 74% of small and micro employers employ at least one worker on a variable-hours contract, and that they account for about 1mn employee jobs at an 8-hour threshold, 2.4 million at a 28 hour threshold and 6.3 million at a 48-hour threshold.

The OA now notes that small businesses have weaker financial resilience, with 22% of micro businesses and 17% of small businesses reporting no cash reserves or cash reserves lasting less than one month, compared with lower proportions for larger businesses.

The department explains why exempting small and micro businesses would significantly undermine the objectives. Many variable-hours workers are employed by small and micro firms, and an exemption could create a two-tier labour market, distort competition and encourage avoidance through subcontracting.

The OA identifies mitigations, including consultation, early engagement, guidance, familiarisation time and clear communication ahead of commencement. This is useful, but high level and does not yet show which mitigations will be adopted or how they will reduce burdens on smaller firms.

The IA should set out the final mitigation package for small and micro businesses, and explain why any residual disproportionate burden is justified by the policy objectives, and provide a fuller appraisal of how impacts vary by sector and business type.

Justification for preferred way forward

Identifying impacts and scale

The OA provides a range-based assessment of impacts across the options. It estimates the Net Present Social Value ranges between -拢10 billion and -拢2 billion over 10 years, reflecting the lowest- and highest-impact option combinations to be consulted on. This is negative as the benefits remain unmonetised, and the final IA should estimate them where possible.

It estimates the Equivalent Annual Net Direct Cost to Business at between 拢240 million and 拢1.2 billion, again, reflecting a low-impact scenario of a one-week presumption and 8-hour threshold, and a high-impact scenario of a 4-week presumption and 48-hour threshold.

The final IA should strengthen the evidence for workforce-planning costs, as the OA reasonably identifies the unit cost assumption as medium-low robustness and medium-high sensitivity. The final IA should test how the selected parameters affect employer flexibility, labour market risks, their associated costs, and productivity. The final IA should be explicit about expected impact on growth. It should distinguish administrative burdens from substantive compliance costs, setting out how the evidence base has tested and quantified these risks.

The department explains that the principal unquantified benefits are to workers through greater predictability, income security, reduced stress and lower costs associated with last-minute travel or childcare. The final IA should estimate the scale of benefits. The IA should consider break-even, or scenario analysis, to illustrate the scale of benefit required for the policy to be net positive.

Counterfactual and baseline

The OA defines the counterfactual as business as usual, in which there is no right to reasonable notice and employers can continue to schedule shifts at short notice. It assumes the related rights to guaranteed hours and payment for short-notice cancellation are not implemented under this scenario. This baseline is clear for the purposes of estimating incremental impacts, but the IA should explain the interaction between the measures and avoid double-counting set-up, or workforce planning costs, across the zero-hours reforms.

Evidence and data

The OA draws on a wide evidence base, including Living Wage Foundation data on notice periods, Chartered Institute of Personnel and Development (CIPD) employer evidence, Annual Survey of Hours and Earnings (ASHE) estimates of employee jobs by hours threshold, the Association of Labour Providers survey on agency workers and academic evidence on wellbeing and productivity. The use of ASHE is explained as an employer-reported proxy for basic hours, while the department acknowledges that basic hours are not necessarily guaranteed hours.

The department explains that the number of guaranteed hours across the labour market cannot be identified directly, that agency-worker contractual hours are difficult to isolate, and that several estimates rely on proxies or stakeholder engagement. It now draws on DBT-commissioned Ipsos research, including a quantitative survey and qualitative interviews, to fill evidence gaps on workers in insecure work, current notice periods and the impacts of short-notice scheduling.

Uncertainty and risk

The OA now gives fuller consideration to operational need, enforcement complexity, agency-worker models, potential avoidance behaviour, overstaffing, reduced access to flexible work and employment tribunal impacts. It identifies risks around loss of flexibility for employers, possible reductions in labour demand for some workers, impacts on agency-work business models, potential overstaffing and increased employment tribunal demand. It explains that the impact depends heavily on the final presumption of reasonable notice, and the eligibility threshold.

The department recognises uncertainty in the estimates. Key assumptions include the number of workers in scope, the number of employers affected, current notice periods and the unit cost of workforce planning. The assumption log records robustness and sensitivity, which is helpful.

Selection of the preferred option

The OA does not select a preferred option for the main parameters because the Department is consulting. The department explains that consultation responses will inform the final IA. The OA therefore justifies the preferred way forward as consulting on a bounded set of options, rather than prematurely selecting a single parameter package.

The final IA should provide a fuller comparative appraisal of the selected parameters against the alternatives, using consultation evidence and critical success factors to explain the final choice.

Regulatory scorecard

Part A

The OA describes the overall impact on total welfare as uncertain because the policy transfers risk from workers on variable-hours contracts to employers. It estimates an NPSV range of -拢10 billion to -拢2 billion, driven by costs associated with workforce planning. The lower-impact end reflects the least costly combination modelled, while the higher-impact end reflects the most costly combination modelled. Unquantified worker benefits are described as significant but uncertain.

The quantified costs capture only administration and planning burdens, while leaving the more substantive economic cost of reduced scheduling flexibility unassessed. The final IA should test how the selected parameters affect employer flexibility, labour market risks and its associated costs, employment composition, productivity and be explicit about expected impacts on growth. It should distinguish administrative burdens from substantive compliance costs.

The OA describes business impacts as negative, with quantified costs including one off familiarisation and implementation costs of 拢110 million to 拢230 million. It estimates annual workforce planning costs of around 拢500 for small and micro businesses and 拢1,200 for medium and large businesses, and therefore an EANDCB of 拢240 million to 拢1.2 billion.

The OA describes household impacts as positive because workers are expected to receive greater predictability and security over their hours, reducing stress and helping with financial planning, childcare and travel. The IA should be clear about which categories of worker/households would see a positive impact, and which negative.

The OA does not consider adverse impacts on worker stress and wellbeing from any increase in unemployment as a result of the measure. The OA focuses on workers currently in employment who report adverse effects from short-notice scheduling.

The final IA should consider whether flexible work arrangements can provide access to employment and experience for some groups. It should assess whether any reduction in the availability of highly flexible work could affect employment opportunities for students, those with limited work experience, or others using such roles as a first step into the labour market. The OA notes that worker benefits are unquantified and the IA should estimate the scale of the benefits.

Part B

The OA assesses the business environment impact as potentially working against the ease of doing business, because the measure may reduce the speed with which employers can adapt staffing levels to demand. The final IA should provide an assessment of growth impacts, rather than relying on general productivity arguments, and explain productivity effects, reduced flexibility, labour market risks, including changes in employment composition.

The measure is not expected to have a direct impact on trade and investment because the affected contracts are mainly used in non-traded sectors such as retail, hospitality, health and social care. Foreign-owned companies are not treated differently from UK-owned companies.

Monitoring and evaluation

The OA commits to a post implementation review within 5 years of the secondary legislation coming into effect. The department identifies potential evidence sources and approaches, including regular stakeholder engagement, statistically representative surveys of individuals and employers, possible focus groups, ONS data on zero-hours and temporary contracts, ASHE, and relevant think-tank or business surveys. It refers to DBT-commissioned Ipsos research and future surveys to establish baselines and fill evidence gaps.

The OA sets out potential review questions, including whether the measure has increased notice of shifts, improved predictability, generated intended outcomes and produced unintended consequences. It proposes examining economic impacts, including costs to employers and benefits to workers and employers. The final IA should develop this into a fuller monitoring and evaluation plan, including baselines, named datasets, reporting cadence, evaluation governance and how findings will inform any future adjustment to the regulations. Where outcome targets are difficult to specify it should identify practical input- or output-based measures that can still be used to assess whether the policy is working as intended.

The IA should structure the evaluation framework around HM Treasury鈥檚 Magenta Book process, impact and value-for-money evaluation strands, set out a credible approach to causal attribution, and commit to an early interim assessment of administrative and familiarisation costs to test delivery assumptions and inform progress against wider regulatory burden reduction objectives.