A zero-hours contract is generally understood to be a contract between an employer and a worker where the employer is not obliged to provide any minimum working hours and the worker is not obliged to accept any work offered. Payment is only made for work that is carried out.
- Zero hours contracts do not have a specific definition in law - contracts referred to as "zero hours contracts" may differ from one organisation to another.
- Zero hours staff may be engaged as employees or workers. A zero hours worker's employment status will depend on what the contract says and how the arrangement operates in practice (i.e. whether the legal tests of employment are met).
- Employment status is important because it determines an individual's legal rights and an employer's obligations towards that individual.
- Employers should decide how the relationship will operate in practice, apply the corresponding employment status and accurately reflect this in the contract.
- Contracts should specify the employment status, rights and obligations of zero hours staff and confirm basic terms, including pay, holiday entitlements, notice and other terms which relate to the way work will be managed.
- Employers should regularly review working arrangements to assess whether the way in which individuals are working has implications for their employment status. If their status has changed, the employer should consider issuing a new contract to reflect this.
- Exclusivity clauses in zero hours contracts, used to tie workers into working for only one employer even when no work is offered, became unenforceable in May 2015. Zero hours employees have the right not to be unfairly dismissed and zero hours workers have the right not to suffer detrimental treatment for working elsewhere.
11 November 2023
The government announced in November 2023 that it will introduce legislation allowing for the 12.07% method of calculating holiday accrual to be used for irregular hours workers and those who work for part of the year. This will be based on the number of hours worked in the pay period, for example weekly, monthly, or even daily. Agency workers who work for part of the year or have irregular hours will also be able to have their holiday accrual calculated in this way. This will overturn the effect of the ruling in the Harpur Trust v Brazel case
The Workers (Predictable Terms and Conditions) Act received Royal Assent on 18 September 2023. This Act is designed to “combat” the one-sided flexibility often present in employment relationships that involve variable or zero hours, or are for a fixed term of less than 12 months.
This constitutes a huge change for “tens of millions” of employees across the UK who currently must wait to have their hours, if any, to be confirmed.
On 25 October 2023 Acas opened consultation on a new Code of Practice on handling requests for a predictable working pattern, following the passing into law of the the Workers (Predictable Terms and Conditions) Act. More information is available in our 'in-depth' section.