What is Zero-Hours Contract?

Full Definition

A zero-hours contract is a form of casual working arrangement under which the employer does not guarantee the worker any minimum number of hours of work, instead offering work as and when it is available, and the worker is generally free to accept or decline any particular shift offered. People on zero-hours contracts are usually "workers" rather than full "employees" in UK employment law terms, which affects which statutory rights apply -- they are entitled to the National Minimum Wage or National Living Wage for hours actually worked, paid annual leave accrued in proportion to hours worked (calculated using rolled-up holiday pay rules for irregular-hours workers), and rest breaks, but do not have the same unfair dismissal or redundancy pay rights as employees unless they can show sufficient continuity and mutuality of obligation to be classed as an employee. Since 2015, exclusivity clauses that prevent a zero-hours worker from taking work with another employer are unenforceable, meaning a worker on a zero-hours contract can legally work for multiple employers simultaneously to build up a viable income, and it is unlawful for an employer to subject a zero-hours worker to any detriment for working elsewhere or for refusing to accept an offered shift. Reforms under the Employment Rights Act 2025 are introducing further protections, including a right for qualifying workers with regular hours over a reference period to be offered a guaranteed-hours contract reflecting the hours they actually worked, and a right to reasonable notice of shifts along with compensation for shifts cancelled or curtailed at short notice, aimed at addressing the income insecurity that zero-hours arrangements can create. Worked example: a worker on a zero-hours contract at a retail chain is offered an average of 25 hours a week over several months but has no contractual guarantee of any hours at all; under current law they are paid at least the National Minimum Wage for hours worked and accrue holiday pay proportionally, and cannot lawfully be penalised for also taking a few shifts at a second employer -- and under the phased Employment Rights Act 2025 reforms, having worked a consistent 25 hours a week for a qualifying reference period, they may become entitled to be offered a contract guaranteeing those hours going forward rather than remaining on a fully zero-hours basis.

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