What is a zero-hours contract?
A zero-hours contract is a type of UK employment contract where an employer is not required to offer a minimum number of working hours, and the worker is not usually required to accept every shift offered.
It gives businesses flexibility to meet changing demand while allowing workers to choose when they work, making it a common option for casual or seasonal roles.
When are zero-hours contracts used?
Zero-hours contracts tend to work best when staffing needs change from week to week. Instead of paying people to sit idle during quieter periods, businesses can bring in extra help only when demand picks up.
They're commonly used in industries such as:
- Hospitality, including hotels, pubs and restaurants
- Retail during busy shopping periods
- Healthcare and social care
- Warehousing and logistics
- Education for temporary or cover staff
For employers, they offer flexibility without committing to fixed hours. For workers, they can suit students, semi-retired people or anyone looking to fit work around other commitments.
That said, they're not the right fit for every role, especially where consistent staffing or guaranteed income is important.
How do zero-hours contracts work?
- The employer contacts the worker when work is available.
- The worker can accept or decline the shift in most cases.
- The worker is paid only for the hours they actually work.
- Workers can usually take on jobs with other employers because exclusivity clauses in zero-hours contracts are unenforceable in the UK.
What rights do zero-hours workers have?
Being on a zero-hours contract doesn't mean someone has no legal protection. In fact, zero-hours workers are entitled to many of the same basic employment rights as other workers.
They may be entitled to:
- National Minimum Wage or National Living Wage
- Paid annual leave based on the hours they've worked
- Statutory Sick Pay, if they meet the eligibility rules
- Protection against unlawful discrimination
- A written statement of employment particulars from day one
- The right to work for other employers, as exclusivity clauses in zero-hours contracts are unenforceable
It's also worth remembering that employment rights depend on a person's legal employment status. Someone classed as a worker has different rights from an employee, so employers should make sure contracts accurately reflect the working relationship.
What should employers know before using zero-hours contracts?
A zero-hours contract can be a useful way to manage changing workloads, but it shouldn't be treated as a one-size-fits-all solution. Before introducing one, make sure it's genuinely the right fit for the role and your business.
Keep these points in mind:
- Use zero-hours contracts only where work is genuinely irregular or seasonal.
- Be clear about how shifts are offered, accepted, and cancelled.
- Give workers as much notice as possible before scheduling shifts.
- Pay workers correctly for every hour worked, including holiday entitlement.
- Keep accurate records of hours, pay, and leave.
- Review contracts regularly. If someone is working regular hours over a long period, a contract with guaranteed hours may be more appropriate.
Upcoming changes to zero-hours contracts in the UK
Zero-hours contracts are not being scrapped, but the rules are getting tighter. Under the Employment Rights Act 2025, the UK government is introducing reforms to reduce “one-sided flexibility” in casual work.
The main changes expected include:
- Employers will need to offer eligible zero-hours and low-hours workers guaranteed hours based on the hours they regularly work.
- Workers should receive reasonable notice of shifts, plus changes or cancellations.
- Workers may be entitled to payment if shifts are cancelled, moved, or cut short at short notice.
- Agency workers are expected to be covered too, so businesses cannot simply sidestep the rules by using agency labour.
The government has consulted on key details, including the reference period used to calculate regular hours. Its preferred starting point is 12 weeks, although final rules will be confirmed through regulations.
For employers, the sensible move is to review contracts, rota systems and cancellation practices now. If your business relies on casual shifts, keep clean records of hours worked, notice given and any last-minute changes. The paperwork faff may be annoying, but tribunal claims are worse.
Advantages and challenges of zero-hours contracts
Zero-hours contracts can work well for some businesses, but they're not suitable for every role. Understanding both sides helps employers decide when they're the right option.
Advantages
- Flexibility to increase or reduce staffing as demand changes.
- Ideal for seasonal work, events, and unpredictable workloads.
- Lower labour costs during quieter periods.
- Access to a wider pool of workers looking for flexible hours.
- Helps cover staff absences without committing to fixed contracts.
Challenges
- Workers have no guaranteed income, which can affect retention.
- Last-minute shift changes may reduce employee satisfaction.
- Managing rotas, holiday pay, and working hours can be more time-consuming.
- Regularly scheduled workers may expect contracts with guaranteed hours over time.
- Upcoming UK employment reforms will introduce additional responsibilities for employers using zero-hours contracts.
Frequently asked questions
1. Are zero-hours contracts legal in the UK?
Yes. Zero-hours contracts are legal in the UK, provided employers comply with employment law, including minimum wage, holiday pay, working time rules and other applicable worker rights.
2. Can workers refuse shifts?
In most cases, yes. Zero-hours workers can usually choose whether to accept or decline work offered, although the specific terms of their contract should always be checked.
3. Do zero-hours workers receive holiday pay?
Yes. Zero-hours workers are entitled to paid annual leave. Holiday pay is typically calculated based on the hours they have worked and their average earnings.
