What is a zero-hours contract?
A zero-hours contract is a working arrangement where the employer does not guarantee any minimum hours, and the worker is not obliged to accept hours when offered. The arrangement is sometimes called a casual contract or an on-call contract, though these terms are not interchangeable in law.
Zero-hours contracts are widely used across hospitality, retail, events, and care — any sector where demand fluctuates and businesses need flexible access to labour. In the UK, around one million workers are on zero-hours contracts at any given time, according to the Office for National Statistics.
Despite the name, zero-hours workers still have employment rights. They are entitled to the National Minimum Wage for every hour worked, paid annual leave based on hours worked, and — since April 2026 — statutory sick pay from day one. The "zero" refers to the hours guaranteed by the contract, not the rights that come with the relationship.
What rights do zero-hours workers have?
Zero-hours workers have most of the same rights as other workers, with some differences around entitlements that are calculated on service length or guaranteed hours.
| Right | Status for zero-hours workers |
|---|---|
| National Minimum Wage | Yes — for every hour worked |
| Paid annual leave | Yes — 5.6 weeks accrued on hours worked |
| Statutory Sick Pay | Yes — from day one (since April 2026) |
| Protection from unlawful deduction | Yes |
| Protection from retaliation for refusing shifts | Yes — employers cannot penalise workers for turning down hours |
| Paternity leave eligibility | Yes — day-one right (since April 2026) |
| Guaranteed hours offer (ERA 2025) | Yes — from 2027, after qualifying reference period |
| Unfair dismissal protection | Yes — after 2 years (reduces to 6 months from Jan 2027) |
Holiday pay for zero-hours workers
This is the area where most employers get it wrong. Zero-hours workers are entitled to 5.6 weeks of paid holiday per year — the same as any other worker. Because they do not work fixed hours, the calculation is different.
For workers with irregular hours, holiday pay is calculated using the average hourly pay over the previous 52 weeks in which work was done (not including weeks where nothing was earned). If a worker only did four weeks in the past year, you use those four weeks as the reference.
Since April 2026, employers are legally required to keep records of annual leave and holiday pay for all workers. If your zero-hours workers' leave records are informal or non-existent, you have a compliance gap that needs addressing immediately.
Holiday pay methods for irregular hours workers (from 1 January 2024): Following the Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023, rolled-up holiday pay at 12.07% on each payslip is explicitly lawful again for genuine irregular hours and zero-hours workers. The 52-week average method is also permitted — both are compliant. The Harpur Trust v Brazel ruling (2022) applies specifically to permanent part-year workers, not standard zero-hours casuals.
What ERA 2025 means for zero-hours workers
The Employment Rights Act 2025 introduced several changes relevant to zero-hours workers, with more coming in 2027.
What is already in force
- SSP from day one (April 2026): Zero-hours workers who fall sick are now potentially entitled to statutory sick pay from the first day of illness, regardless of how much they earned in the previous week.
- Day-one paternity leave (April 2026): Paternity leave eligibility no longer requires a qualifying service period.
- Mandatory holiday pay records (April 2026): Keeping leave and holiday pay records for all workers is now a statutory requirement.
What is coming in 2027
The headline change for zero-hours workers is the guaranteed hours right. From 2027, workers who regularly work consistent hours over a reference period — expected to be 12 weeks — will have the right to be offered a contract that reflects those hours. They can accept or decline.
The unfair dismissal qualifying period also reduces from two years to six months in January 2027. Zero-hours workers are typically engaged on an ongoing basis, which means this protection will apply to most long-standing casuals once the change lands.
Track every zero-hours worker's pattern automatically
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Start free — 30 daysWhat good management of zero-hours workers looks like
Zero-hours arrangements work best when there is clarity and consistency on both sides. Workers who feel treated fairly show up reliably. Workers who feel like a number on a list do not.
Give as much notice as possible
Since February 2026, employers and agencies are legally required to give agency workers reasonable notice of shifts and changes. The same principle applies to directly-employed casuals — even where there is no legal minimum. Workers who get seven days' notice plan their lives around your shifts. Workers who get 24 hours do not.
Be consistent about who you call first
Most casual workers have an informal preference order in their head. If you call them consistently and they can rely on regular work, they become reliable. If calls are random and sporadic, they build other commitments and are less available when you need them.
Make availability easy to update
Workers with zero-hours contracts have lives that change. If updating their availability requires a phone call or a message to a manager who may or may not pass it on, it will not happen reliably. A system where workers can update their own availability — and you can see it in real time on the rota — removes this friction.
Track what they actually work
This is not just about ERA 2025 compliance. It is about being fair. A worker who has been doing 25 hours a week for 18 months and whose contract says zero hours is not in an honest arrangement. ERA 2025 gives that worker legal recourse from 2027. Getting ahead of it by offering them something that reflects reality is better for your working relationship and your legal exposure.