Zero Hours Contract: Template & Legal Guide
Understand when zero-hours contracts are appropriate, what rights workers have, and how to draft compliant agreements that work for your business and your staff.
Last updated: February 2025
What Is a Zero Hours Contract?
A zero hours contract is an agreement where the employer is not obliged to provide a minimum number of working hours, and the worker is not obliged to accept any hours offered. They are common in hospitality, retail, and care sectors across the UK.
- The employer offers work as and when available with no guaranteed minimum hours
- Workers on zero-hours contracts are entitled to the National Minimum Wage, holiday pay, and rest breaks
- Zero-hours workers have protection against unfair dismissal after two years of continuous service
- Since 2015, exclusivity clauses in zero-hours contracts are unenforceable
Drafting a Compliant Zero Hours Contract
A well-drafted zero hours contract should clearly state that there is no mutuality of obligation while still providing the statutory particulars required by law. Getting the wording wrong can inadvertently create an employment relationship with guaranteed hours.
- Clearly state there is no obligation to offer work and no obligation to accept it
- Include all day-one statutory particulars even though hours are variable
- Specify how work will be offered and how much notice the worker will receive
- Define the pay rate, holiday accrual method (12.07% of hours worked is standard), and payment schedule
Risks and Alternatives to Consider
Zero hours contracts have reputational risks and may not always be the best solution. If a worker regularly works consistent hours, a tribunal may determine that a contract for set hours has been established through custom and practice.
- Regular patterns of work can establish implied contractual hours over time
- Consider annualised hours, min-max contracts, or part-time contracts as alternatives
- The Employment Rights Bill 2024 proposes giving workers the right to request guaranteed hours after 12 weeks
Key Takeaways
- Zero hours workers have more rights than many employers realise, including holiday pay and protection from unfair dismissal.
- Exclusivity clauses preventing zero-hours workers from working for other employers are banned in the UK.
- Regular working patterns can create implied contractual hours, so review arrangements periodically.
Frequently Asked Questions
Do zero hours workers get holiday pay?
Yes. Zero hours workers are entitled to 5.6 weeks of paid holiday per year, pro-rated based on hours worked. The standard method is to accrue holiday at 12.07% of hours worked. Many employers add this to the hourly rate as rolled-up holiday pay.
Can I stop offering work to a zero hours worker without notice?
Technically, since there is no obligation to provide work, you can stop offering shifts. However, if the worker has been employed for two or more years, they may have unfair dismissal rights. Always seek legal advice before ending a long-standing zero-hours arrangement.
Are zero hours contracts being banned in the UK?
Not outright, but the Employment Rights Bill 2024 proposes giving zero-hours workers the right to request a guaranteed hours contract after 12 weeks of regular work. This is expected to become law in 2025 or 2026.
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Get Started FreeThis is guidance for UK businesses, not legal advice. For complex legal matters, consult a qualified solicitor.
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