Northern Ireland confirms crackdown on zero hours contracts

Northern Ireland’s Department for the Economy has published its formal response to last year’s Good Jobs consultation on employment rights. The aim is to modernise Northern Ireland’s employment law framework and bring it closer into line with Great Britain. It is headline news for employers with a presence in Northern Ireland because it signals the biggest overhaul of employment law there in more than a decade. One of the biggest issues in the consultation is the proposed changes to zero hours contracts which are widely used in sectors like hospitality and retail and could fundamentally change how employers manage flexibility in their workforce. We’ll speak to a Belfast-based employment lawyer about those changes and how employers can prepare. 

The Department’s response paper is called ‘The Way Forward’ and sets out which of the various proposals it intends to take forward. It’s not law yet but we do expect to see a draft Bill sometime in 2026 at the earliest, with some changes potentially coming in sooner through secondary legislation or statutory Codes of Practice. Either way, the direction of travel is clear: Northern Ireland is moving toward significantly stronger worker protections, greater alignment with GB - and with the Republic of Ireland in some areas - and a more regulated employee-focused employment law framework.

On zero hours, the Department has confirmed it will legislate to tackle exploitative practices without banning zero hours contracts entirely. A new right to request banded hours contracts is being introduced for workers who regularly work consistent patterns despite having zero or low-hours contracts. There’ll also be a new right to reasonable notice of shifts, and compensation where shifts are cancelled at short notice. And as expected, exclusivity clauses will be banned for contracts below the lower earnings limit. 

So, let’s get a view on this. Earlier I caught up with employment lawyer Laura McManus, who joined me by phone from Belfast. So where are we now?”

Laura McManus: “It’s the end of the consultation period. The proposed bill is going to be put forward to the Assembly next year with the view to anything to be implemented will come in 2027 so it's a really good idea to be across this and taking it almost as policy advice at this stage for anybody who is either using zero hours or looking at the south of Ireland to see how they're operating perhaps, with their operations there or, equally, the changes that are proposed in GB if they do have cross jurisdictional practices across that. So, what's going to change? We're going to move towards banded hours contracts. Now what that means in practice is that if you have somebody who is ‘employment at will,’ almost, typically in our hospitality sectors, where you’re calling them in and they don't have a fixed hours pattern. It seems to be after six months – so 26 weeks – they will have the right to ask for a banded contract and that means that their contract will then be banded to allow them to have an average of a set number of hours over a 26-week period. That's what we think it's going to be, 26 weeks. So the key points to take out of that are it's going to be different to GB, and it's also going to be different to ROI. So as usual in Northern Ireland, we're going to be a little bit different. In GB they have not moved towards a banded contract yet and in ROI it's a 12-month reference period. So we are going to be slightly different but I suppose in practice what it means is that if you have employees who are working, say, every Saturday and Sunday night in a bar, let's say, for example, and their patterns are fairly predictable in that way, after 26 weeks they will have the right to ask to have that fixed and to be guaranteed an average of those hours over a six month period. So that could cause some difficulties for employers who say, well, we’re only guaranteed to need them in the winter when people are more likely to go out into bars, whereas in the summer they're going to have barbecues at home, for example. So it's those kind of fluctuations that employers are going to need to be planning ahead. They're going to need to be looking over a six-month average as to where their workforce is needed, and not needed, and planning for that. Equally, if we have situations where shifts are cancelled at short notice – and short notice is proposed to be within three hours – so if you're cancelling an employee’s shift within three hours of the shift beginning, that employee is entitled to be paid for that shift, or for a portion of that shift. Again, that's going to impact any companies who are operating and, you know, they've put the feelers out to everybody that they have on their list and then suddenly ten arrive where they thought they were only going to be eight. So it's going to be quite challenging for those people operating in that space. So what do people need to do now? Obviously, as I've said, this isn't likely to come into law, to fixed law, until 2027 but now is always a good time to start planning, to start assessing your workforce, and to get into the rhythm of how that's going to need to operate on a six monthly basis, to work through it and to find where the tripwires are going to be. What is it in your business that's going to be particularly difficult to operate in that way? Is it that point of calling people in? You're used to calling in 12 people where you only need eight, or is it that actually that operation over a six-month period, your seasonal changes, is that where it's going to be difficult? So we’re always saying to clients do your assessment, sit back when you’re not under the pressure of it being law and having to make the change really quickly. Assess it now and see what changes you can or need to make to get yourself compliant by 2027.”

Joe Glavina: “There is a huge raft of changes proposed in this consultation, Laura. Is the change to zero hour contracts the biggest, or one of the biggest, in your view?”

Laura McManus: “I think it is because zero hours contracts, when they first came out with it in the Assembly, it was very much ‘we're going to ban these, they’re going to go’ so that was the talking point and then, obviously, through the consultation they've said we're moving away from a complete ban and we're going towards banded hours. The banded hours is more in line with what has taken place in the Republic of Ireland – they brought it in about 18 months or two years ago – so for anybody whose operations are north and south, that's great for them, they're getting into line. It's going to be a little bit different for anybody who has UK-wide operations because, again, they're going to be operating in a certain way in GB and a different way in Northern Ireland. So it is the biggest talking point, I think, coming out of the of the consultation. Some of the other points are more Code of Practice based, they are recommendations, aside from the holiday pay point, but it is the biggest one and I think it's the one that's going to have the most impact, specifically in the hospitality sector.”

The Northern Ireland government’s response paper is called ‘The Way Forward’ and was published on 28 April. It sets out in detail the outline proposals for a new Employment Bill which will cover not only zero hours contracts, but also a number of other key areas including holiday pay, the right to disconnect, trade union access and recognition and Laura will be covering all those in the next few weeks so do watch this space. Meanwhile we have included a link to the paper in the transcript of this programme for you.

- Link to ‘Good Jobs’ Employment Rights Bill – The Way Forward