Employment Rights Act (ERA) update: How will the ERA impact the use of fixed term contracts, zero-hours arrangements and casual worker agreements in Schools /Trusts?

Welcome to our latest article in our series on the Employment Rights Act (ERA). If you have missed any of our previous articles, you can read them here.

In this blog, we consider how the new protections and obligations for employers under the ERA will impact schools/trusts using fixed-term contracts, zero-hours arrangements and casual worker agreements, and how to prepare for the forthcoming changes.

What is changing and why?

Schools and trusts rely on a range of different contracts to engage staff across teaching and support roles. Fixed-term contracts are often used to cover staff on family leave or for other temporary requirements.   Zero-hours or ‘casual’ arrangements are often used within contracts and agreements to engage exam invigilators, lunchtime supervision, and wrap-around care, and to fill urgent gaps.

If someone on a zero-hours or casual hours arrangement actually works a regular pattern of hours, schools/trusts will be required to offer guaranteed hours reflecting an average of worked hours over a (still to be defined) reference period. The ERA also introduces obligations to give reasonable notice of shifts, and to pay compensation when they are cancelled or curtailed at short notice. We expect these changes to take effect in 2027.

In addition, from the expected date of 1 January 2027, most employees will be able to bring an unfair dismissal claim after only six months’ service, and the compensatory cap on unfair dismissal claim awards will be removed.  You can read more about the new protections for unfair dismissal in our previous article.

Why This Matters

The ERA seeks to improve the benefits of flexible working arrangements for workers by introducing the following changes:  

Guaranteed-hours offers: If a person on a zero-hours or low-hours contract has been regularly working more hours than their contract guarantees, an employer must offer terms that reflect that working pattern to align the written contract with the reality of the working arrangement. A reference period will be set over which this will need to be assessed (widely expected to be 12 weeks). We do not yet know where the threshold for a low-hours contract will be set. This threshold will be key to understanding the impact of these changes on schools currently using low-guaranteed-hour contracts.

Reasonable notice of shifts: Employers will need to publish and apply reasonable notice periods for offering work. What counts as ‘reasonable’ will depend on context and will be set out in future regulations (although it will not be more than seven days).

Compensation for cancellations: If an employer cancels, moves or cuts short a shift at short notice, they will be required to compensate the worker. Again, the amounts of compensation due and the thresholds in terms of timing will be set out in future regulations. 

Unfair dismissal: From the 1st of January 2027, the unfair dismissal qualifying period will reduce from two years to six months, and the compensatory cap for awards for unfair dismissal will be removed. Staff who are moved from casual agreements with no guaranteed hours to contracts with guaranteed hours are likely to become employees and therefore have the right not to be unfairly dismissed after six months’ service. For schools, this means processes relating to managing performance and conduct issues will need to be well structured and closely followed, and clear documentation will need to be gathered to support the fair reason for any dismissal relating to the employee.

What This Means For Schools and Trusts 

Some roles are more likely to be impacted by the changes to rules on the use of zero-hour arrangements and casual worker agreements than others. Schools/trusts should review their use of casual worker agreements, especially for the roles outlined below and any other roles that may be affected by the changes. 

Exam invigilators: Many schools/trusts rely on a group of invigilators who return year after year. If a school engages the same invigilators to broadly similar patterns each year and the hours worked do not reflect the written contract, then there is a risk that a guaranteed hours offer will need to be made. The cancellation-pay rules may also impact here, for example, if invigilation requirements change at short notice, this may trigger obligations to make late-notice payments to staff. The use of fixed-term contracts for invigilators may be an option, including a set termination date aligned with the end of the exam period. However, caution is advised as a series of fixed-term contracts over four years is likely to mean the employee is considered to be a full-time employee under the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002 (FTRs). 

Peripatetic sports and music teachers: Where lessons are timetabled weekly, schools/trusts will likely trigger the duty to offer guaranteed hours if the number of hours worked does not reflect the number of hours stated in the contract. To avoid this, schools/trusts might consider moving away from zero-hours arrangements towards low guaranteed hours contracts which are aligned to the hours worked, or using annualised-hours contracts. Schools can keep flexibility for concerts, tournaments and events, but will need to be mindful that regular weekly sessions are likely to trigger the new duty. 

Wrap-around care and lunchtime supervisors: Regular sessions, even if short, may meet the qualifying test for guaranteed-hours offers. There may be a need to consider term-time only guaranteed-hours contracts with baselines for weekly hours, and overtime to manage peak demands. 

Considerations for Schools When Using Fixed-term Contracts

Fixed-term contracts will remain the right tool where the demand is time-limited, such as maternity and other family leave, long-term sickness, secondments, externally funded or time-limited projects, or short-term recruitment cover. However, fixed-term contracts require a fair reason to bring them to an end, including a decision not to renew the contract on expiry. 

Fixed-term Staff and Redundancy Rights

The reason for terminating a fixed-term contract will often be redundancy, and school employers should remain aware that staff on fixed-term contracts will accrue redundancy payment rights after two years’ service.

Staff on fixed-term contracts will also have the right not to be unfairly dismissed after six months, and so a full redundancy process will need to be followed, including pooling fixed-term staff with other staff performing similar roles.

How to Prepare for the Changes to Fixed Term and Casual Worker Arrangements  

Schools/trusts should consider an audit exercise and identify all fixed-term and casual contracts.  It will be important to consider which are genuinely ad hoc and which involve regular work, even if the hours are low. More flexible arrangements can still be used where demand is genuinely unpredictable.  If you would like us to review any of your casual or fixed-term contracts, please feel free to send them to the team.  

Zero-hours contracts will still have a place where work demand is genuinely unpredictable (e.g. occasional cover, one-off events, holiday clubs that may or may not run). When using these contracts, schools/trusts should put in place systems to track the hours worked per person across the reference period (to be defined) and be ready to change to an offer of guaranteed hours if a regular pattern of work emerges.  Schools and trusts should be mindful to prevent any drift in employment status.  Just because someone is labelled as a ‘casual worker’ when they join, does not mean a tribunal will agree when they look at how the arrangement worked and developed in practice. 

We will keep you updated when government regulations are published, which will set out the details on the duty to offer guaranteed hours, including the reference period, the low-hours threshold and what is meant by short notice when it comes to the cancellation of shifts.

How Judicium Can Help You

To reflect the forthcoming changes to protection from unfair dismissal, we are updating the following policies and supporting documents, ready to support you in your school/trust:

• Probationary Period Policy and related documents 
• Contracts
• Disciplinary Policy and Procedure
• Capability Policy and Procedure

Stay Informed... 

The Employment Rights Act represents a major shift in employment law. Most changes are not immediate, but schools/trusts that prepare now will be better placed to manage risk, control costs, and maintain positive staff relations.

We will continue to send out regular updates on the different aspects of the Act to keep you informed of the changes. Watch out for more updates, which will focus on forthcoming changes and how you can prepare.

Subscribe here to keep informed of the proposed changes and how best to prepare for them. Our team are also here to help our clients review policies, train managers, and prepare for the new landscape.

As always, we're here to support you with any questions you may have in relation to the Employment Rights Act 2025. Please don’t hesitate to get in touch via the usual channels if you need advice or assistance.   

You can contact us at employmentlawadvice@judicium.com and you can find information regarding our Employment Law and HR service  here. 

Follow us on Twitter: @JudiciumEDU.