Zero-Hours Contracts — Guide for UK Employers and Workers
Last updated: May 2025 · 9 min read
Zero-hours contracts offer employers flexibility but carry legal obligations that are frequently misunderstood. Workers on zero-hours arrangements have real statutory rights — including holiday pay, National Minimum Wage, and pension auto-enrolment — even when hours are not guaranteed.
1. What is a zero-hours contract?
A zero-hours contract is an arrangement under which the employer does not guarantee any minimum number of working hours. The employer calls the worker when work is available; the worker may (but is not obliged to) accept. There is no obligation on either side to offer or accept work.
They are widely used in hospitality, retail, healthcare, events, and seasonal agriculture — any sector where demand for labour fluctuates significantly.
2. Legal position
Zero-hours contracts are legal in the UK. There is no prohibition on using them. However, several legal restrictions apply:
- Exclusivity clauses are banned (Small Business, Enterprise and Employment Act 2015) — workers may work for other employers
- Anti-avoidance — employers cannot use zero-hours arrangements to sidestep statutory employment rights that would otherwise apply
- Right to request predictable terms (Workers (Predictable Terms and Conditions) Act 2023) — available after 26 weeks
3. Employment status on zero-hours contracts
Most zero-hours workers are classified as workers (limb (b)) under the Employment Rights Act 1996 — a middle category between self-employed and employees:
| Right | Employee | Worker (limb b) | Self-employed |
|---|---|---|---|
| National Minimum Wage | Yes | Yes | No |
| Statutory holiday (5.6 weeks) | Yes | Yes | No |
| Pension auto-enrolment | Yes | Yes (if qualifying) | No |
| Statutory sick pay | Yes | Yes (if qualifying) | No |
| Unfair dismissal protection | Yes (2 years) | Limited | No |
| Statutory redundancy pay | Yes (2 years) | No | No |
| Written terms of engagement | Yes (day one) | Yes (day one) | No |
Courts and tribunals look at the actual working relationship, not just what the contract says. Regular patterns of work, direction and control, and integration into the business all push toward employee status regardless of the contract label — as established in Uber BV v Aslam [2021] UKSC 5.
4. Holiday pay for zero-hours workers
Zero-hours workers are entitled to 5.6 weeks of statutory annual leave per year, accrued proportionally to hours worked.
The calculation method: 12.07% of hours worked = holiday entitlement in hours (this is derived from 5.6 weeks as a percentage of 52 − 5.6 = 46.4 working weeks).
Holiday pay rate: the average weekly pay over the previous 52 paid weeks (ignoring weeks with no pay), pursuant to the Working Time Regulations 1998 as amended.
Rolled-up holiday pay is prohibited following the Supreme Court ruling in Harpur Trust v Brazel [2022] UKSC 21 and subsequent regulatory confirmation. You must not include holiday pay in the hourly rate — workers must accrue and take leave as distinct events.
5. Right to request predictable terms (2023 Act)
The Workers (Predictable Terms and Conditions) Act 2023 introduces the right for workers to request a more predictable working pattern. Key points:
- Available after 26 weeks of working for the same employer
- Covers: fixed number of hours, fixed days/times, or longer fixed-term engagement
- Employer must respond within 1 month and may only refuse on one of the specified grounds (e.g. planned structural changes, additional cost not justified)
- Workers may make two requests in any 12-month period
- Dismissal or detrimental treatment for exercising this right is unlawful from day one (no qualifying period required)
6. Pension auto-enrolment
Zero-hours workers who meet the qualifying criteria must be auto-enrolled into a workplace pension:
- Aged 22 or over
- Under State Pension age
- Earning more than £10,000/year (£833/month; £192/week)
Because zero-hours earnings fluctuate, you must assess eligibility each pay reference period. Workers not meeting the £10,000 threshold may opt in to a pension, and qualifying earnings still apply between £6,240 and £50,270.
7. When to use zero-hours contracts — and when not to
Appropriate uses:
- Seasonal hospitality or events where demand is genuinely unpredictable
- Bank staff or relief pool workers in healthcare and care settings
- Cover for absence or short-term peaks
Not appropriate:
- As a way to avoid employment rights for workers with regular, consistent hours
- Replacing fixed-hour employees to reduce costs without a genuine operational reason
- Where exclusivity was needed but can no longer be imposed
If a zero-hours worker works a consistent pattern over many weeks, a tribunal may find implied contractual terms — including guaranteed hours — based on the established practice, regardless of the written contract.
Frequently asked questions
Are zero-hours contracts legal in the UK?
Yes — zero-hours contracts are legal in the United Kingdom. There is no legislation banning them (unlike the Republic of Ireland, which introduced restrictions in 2024). However, the law prohibits exclusivity clauses in zero-hours contracts (since 2015), and the Workers (Predictable Terms and Conditions) Act 2023 gives workers the right to request guaranteed hours after 26 weeks of work.
Do zero-hours workers get holiday pay?
Yes. Zero-hours workers are entitled to 5.6 weeks of statutory annual leave per year, accrued in proportion to the hours they work. The correct method is to calculate 12.07% of hours worked as holiday entitlement (5.6 weeks / 46.4 working weeks). Rolled-up holiday pay — where holiday pay is included in the hourly rate rather than paid when leave is taken — is prohibited since the Supreme Court ruling in Harpur Trust v Brazel (2022) and subsequent regulatory confirmation. Workers must accrue and take holiday as separate events.
Can I include an exclusivity clause in a zero-hours contract?
No. Exclusivity clauses in zero-hours contracts — provisions that prevent workers from working for other employers — have been banned since the Small Business, Enterprise and Employment Act 2015. Any such clause is unenforceable. Workers on zero-hours contracts are free to work for multiple employers simultaneously. Employers must not take any detrimental action against a zero-hours worker for working elsewhere.
What is the right to request predictable terms under the 2023 Act?
The Workers (Predictable Terms and Conditions) Act 2023 (expected to come into full force in 2024/25) gives workers who have worked for 26 weeks the right to request a more predictable working pattern — for example, a guaranteed minimum number of hours per week. Employers must consider the request and may only refuse on specified business grounds. Workers can exercise this right twice in any 12-month period. Dismissal or detriment for asserting this right is a day-one right (no qualifying period).
How is a zero-hours worker different from an employee?
Zero-hours workers are typically "workers" (limb (b) of section 230 of the Employment Rights Act 1996) rather than employees. Workers have fewer employment rights than employees: they are not entitled to statutory redundancy pay, do not have unfair dismissal protection (unless dismissed for asserting a statutory right), and cannot bring an unfair dismissal claim. However, they are entitled to: National Minimum Wage, statutory holiday (5.6 weeks), pension auto-enrolment if earnings qualify, written terms of engagement, and protection from discrimination. In practice, the courts look at the reality of the working relationship — regular, consistent engagement can lead to employee status being found despite the contract label.