Seasonal staff are essential to many leisure and tourism businesses, helping employers respond to peaks in customer demand. Zero-hours contracts have traditionally provided a flexible way of meeting those staffing needs, but significant employment law reforms mean employers should now review whether their existing arrangements remain fit for purpose.
The Employment Rights Act 2025 will introduce important changes between now and 2027, affecting everything from holiday pay and record-keeping to working hours, shift scheduling and cancellations.
How can businesses retain the flexibility they need while managing the legal risks? Below, we look at the key reforms and practical considerations for leisure and tourism employers.
Key Employment Law Changes
Holiday Pay and Hours of Work
The Employment Rights Act 2025 introduces a number of important changes for employers who rely on zero-hours contracts. With reforms taking effect in stages between now and 2027, businesses should review their approach to holiday pay, record-keeping and working hours.
Holiday Pay: Since April 2026, employers have been required to keep records demonstrating compliance with statutory holiday entitlement and holiday pay requirements. This applies to all employees and workers, including those engaged on zero-hours contracts. These records must be retained for at least six years.
The Fair Work Agency was established on 7 April 2026 to strengthen the enforcement of employment rights, including statutory holiday entitlements. Employers are required to maintain robust record-keeping practices relating to holiday pay, with these obligations already in force from 6 April 2026. The Fair Work Agency’s enforcement powers governing employer holiday pay compliance are expected to come into force in 2027.
Now is a good time to review holiday pay record-keeping arrangements and address any gaps, as compliance is likely to come under increased scrutiny once the Fair Work Agency’s enforcement powers take effect.
Working Hours: From 2027, workers on zero-hours contracts or low-hours contracts are expected to gain a statutory right to be offered guaranteed working hours. While workers will retain the option to decline the offer, for example, if they wish to preserve flexibility, the obligation will rest firmly with employers to make the offer. Employers are expected to be required to make further offers of guaranteed hours following each reference period where workers continue to qualify. The Government has indicated a preference for a 12-week reference period, although the detail remains subject to consultation.
The detailed operation of the new regime is still subject to consultation, which remains open until 25 August 2026. Issues under consideration include the length of reference periods, the treatment of seasonal peaks, flexibility in the allocation of guaranteed hours and arrangements for temporary staffing needs. These issues are likely to be of particular interest to leisure and tourism businesses, where demand can fluctuate significantly throughout the year. Employers who rely heavily on seasonal staff may therefore wish to engage with the Government’s consultation while there remains an opportunity to influence the final framework.
In practical terms, the changes may present challenges for seasonal businesses, which could be required to offer guaranteed hours that cannot be sustained outside peak periods. Employers should ensure that the basis of the engagement is clearly documented from the outset and that any seasonal fluctuations in demand are reflected in workforce planning and contractual arrangements.
Where changes to hours become necessary, businesses should keep clear records of the rationale for those decisions, review staffing requirements regularly and consult with affected workers wherever possible. Taking these steps can help reduce the risk of disputes and support a fair process if an engagement ultimately comes to an end.
There is also a risk that workers who regularly work consistent hours may acquire employee status, bringing with it additional employment rights, including protection from unfair dismissal. This is particularly important given the reduction in the qualifying period for unfair dismissal claims from two years to six months from 1 January 2027.
Employers should therefore ensure that contracts and policies accurately reflect the nature of the engagement and keep arrangements under regular review. Managers should also be trained to follow fair procedures when ending employment or engagements, as procedural failings can give rise to claims even where there are legitimate grounds for the decision.
Scheduling, Availability and Cancellations: Minimising Conflict
Disputes may arise not only in relation to guaranteed working hours, but also around shift allocation, availability, short-notice changes and shift cancellations. This is particularly common in the leisure and tourism sector, where demand can fluctuate significantly throughout the year.
Further reforms due to take effect from 2027 will introduce new rights relating to shift arrangements, including requirements around notice of shifts and compensation where shifts are cancelled, curtailed or moved at short notice. While the broad framework is now set out in the Employment Rights Act 2025, the detail of how these provisions will operate in practice remains subject to consultation until 25 August 2026. Employers in the leisure and tourism sector may therefore wish to engage with the consultation process, particularly as it includes questions around seasonal work, staffing patterns and operational flexibility.
Employers can prepare by adopting a transparent and consistent approach to shift allocation. Clear criteria, such as availability, skills and fairness, can help reduce perceptions of favouritism and minimise disputes. It is also sensible to consider how shifts and any subsequent changes are communicated to workers and to ensure managers are applying arrangements consistently.
The Employment Rights Act 2025 does not prevent employers from using zero-hours contracts, but it will make them more heavily regulated. As the new rules take effect, businesses should consider whether the flexibility offered by zero-hours arrangements still outweighs the additional administrative obligations they will bring.
For some employers, particularly those with relatively predictable seasonal demand, alternative staffing models may offer a better balance between flexibility, cost and legal risk. This makes it a good time to review the different staffing models available.
Choosing the Right Seasonal Model
Before deciding whether a zero-hours arrangement is right for your business, it is worth considering the alternatives. The most appropriate model will depend on your staffing requirements, the level of flexibility needed and the employment status of the individual, as different arrangements carry different legal obligations.
- Fixed-term employment contracts
Suitable where staff are needed for a defined period, such as the summer season. Fixed-term employees benefit from full employment rights and are typically used where a greater degree of certainty around hours and duration is required.
- Part-time contracts
Employees work a set number of reduced hours, with scope for additional hours during busy periods. Part-time employees are entitled to the same rights as full-time employees on a pro-rata basis.
- Agency workers
Staff are supplied by an employment agency, reducing the employer’s administrative burden but often increasing costs. This can provide valuable flexibility for short-term, event-based and seasonal staffing needs. It may also reduce some of the employment status risks associated with engaging temporary staff directly. However, end users still have legal obligations towards agency workers and should understand where responsibility sits in practice.
- Casual workers
Typically engaged on an ad hoc basis with no obligation to offer or accept work. However, where working arrangements become regular, there is a risk that employment status may change.
- Zero-hours contracts
Commonly used where demand fluctuates and there is no guaranteed minimum number of hours. Workers are entitled to key rights, including holiday pay and National Minimum Wage protection, and significant further reforms are expected to take effect during 2027.
Getting the Status and Documentation Right
The label given to an individual does not determine their employment status. Workers are often engaged on a casual or flexible basis and are entitled to core protections, including National Minimum Wage and statutory paid holiday. However, if the reality of the working relationship is more consistent with employment, an individual engaged as a worker may acquire employee status and the additional rights that come with it.
Employers should therefore ensure that contracts and other documentation clearly reflect the intended nature of the engagement. Clear documentation can help manage expectations, reduce the risk of disputes and support the business’s position if status is later challenged. However, tribunals will look at the reality of the relationship, not just the wording of the contract, so working practices should be consistent with the nature of the arrangement.
Employers should also be mindful of the risk of an umbrella contract arising over time. This can occur where seasonal staff return year after year, regularly work similar patterns of hours, or are given assurances about future work. In these circumstances, a tribunal may find that employment continues between assignments, preserving continuity of employment and allowing statutory rights to build up over time. This can have significant implications for employment rights such as unfair dismissal and redundancy pay.
Managers should therefore avoid making commitments about future work unless they genuinely reflect the intended arrangement, and seasonal engagements should be documented and reviewed regularly, particularly as forthcoming reforms increase the importance of getting employment status, holiday pay and working time arrangements right.
Managing Seasonal Staff Issues
Busy periods can place significant pressure on both staff and managers, but workplace issues should not be put on hold. Performance, conduct, capability and attendance concerns should still be addressed promptly and proportionately.
Even during peak periods, employers should follow a fair process. Employees should have an opportunity to respond to concerns, and managers should keep clear written records of key discussions and decisions. This will help reduce the risk of disputes and support the organisation’s position if concerns escalate.
Setting clear expectations from the outset is equally important. Staff should understand the standards expected of them, and minor issues can often be resolved informally through early conversations and coaching.
Employers should also be mindful of wellbeing. Long hours, busy environments and increased pressure can affect performance and behaviour. Recognising these pressures and addressing concerns at an early stage can help maintain morale, reduce conflict and support performance during busy periods.
Any concerns that arise during the season should be documented and taken into account when making decisions about future engagement or season-end exits.
When to Seek Legal Advice
With significant employment law reforms taking effect during both 2026 and 2027, seasonal employers should take the opportunity to review how they engage, manage and retain staff.
Early advice can help businesses choose the right staffing model, manage employment status risks and ensure contracts and working practices remain fit for purpose. It can also be invaluable when dealing with more complex issues such as performance concerns, workforce changes or season-end exits.
Taking a proactive approach now can help reduce the risk of disputes later and put your business in a stronger position as the legal landscape evolves.
At Stephens Scown, we work with leisure and tourism businesses of all sizes, providing practical advice on seasonal staffing, zero-hours arrangements, employment status, contracts and day-to-day HR challenges. To find out how we can help, call 0345 450 5558 or email [email protected]. This article was co-authored by Valerie Curnow and Joey Medway.