What are zero hours contracts?

A zero hours contract is a casual agreement between an employer and an individual

Generally, the employer will not guarantee the individual any hours of work. The employer offers the individual work when it arises, and the individual can either accept the work or decline the offer of work on that occasion. Regardless of how many hours are actually offered, the employer must pay at least the National Minimum Wage.

Everyone employed on a zero hours contract is entitled to statutory employment rights. There are no exceptions. A person will benefit from the employment rights associated with their employment status and individuals on a zero hours contract will either have the employment status of a ’worker’ or an ‘employee’.

Any individual on a zero hours contract who is a ‘worker’ will be entitled to at least the National Minimum Wage, paid annual leave, rest breaks and protection from discrimination.

Zero hours contracts do not allow employers to avoid their responsibilities. All staff, regardless of their contract, are entitled to employment rights and should be treated fairly and within the law.

A person is generally classed as a ‘worker’ if:

  • they have a contract or other arrangement to do work or services personally for a reward (your contract doesn’t have to be written)
  • their reward is for money or a benefit in kind, for example the promise of a contract or future work
  • they only have a limited right to send someone else to do the work (subcontract)
  • they have to turn up for work even if they don’t want to
  • their employer has to have work for them to do as long as the contract or arrangement lasts
  • they aren’t doing the work as part of their own limited company in an arrangement where the ‘employer’ is actually a customer or client

Workers are entitled to certain employment rights, including:

  • receive paid annual leave.
  • limit working time to a maximum number of hours per week.
  • have rest breaks.
  • be paid the national minimum wage.
  • not to have unlawful deductions made from wages.
  • not receive less favourable treatment on account of working part-time.
  • be protected from discrimination because of age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race (including colour, nationality and ethnic or national origins), religion or belief, sex or sexual orientation.
  • receive equal pay and conditions for equal work.

Workers usually aren’t entitled to:

  • minimum notice periods if their employment will be ending, for example if an employer is dismissing them
  • protection against unfair dismissal
  • the right to request flexible working
  • time off for emergencies
  • statutory redundancy pay
  • casual or irregular work

Someone is likely to be a worker if most of these apply:

  • they occasionally do work for a specific business
  • the business doesn’t have to offer them work and they don’t have to accept it – they only work when they want to
  • their contract with the business uses terms like ‘casual’, ‘freelance’, ‘zero hours’, ‘as required’ or something similar
  • they had to agree with the business’s terms and conditions to get work – either verbally or in writing
  • they are under the supervision or control of a manager or director
  • they can’t send someone else to do their work
  • the business deducts tax and National Insurance contributions from their wages
  • the business provides materials, tools or equipment they need to do the work

A person is generally classed as a ‘employee ’ if:

An employee is employed under a ‘contract of employment’, which includes a contract of apprenticeship. This definition may be quite clear where the employee has received a document from their employer entitled ‘contract of employment’.

It is important to note that, legally, a contract of employment can exist without a written document. All the terms of such a contract will be implied and will typically comprise all verbal agreements and customs and practices between the parties.

Employees benefit from the full protection of employment law, although some employment law rights do require the employee to have a period of continuous employment in order to qualify for them, for example, the right to claim unfair dismissal and a statutory redundancy payment normally require two years’ continuous employment.

  • be issued with written particulars of employment.
  • not be unfairly dismissed.
  • receive statutory redundancy pay on redundancy.
  • receive notice of termination of employment.
  • receive guarantee payments in respect of lay-off and short-time working.
  • receive itemised pay statements.
  • be paid statutory sick pay.
  • take maternity, paternity, adoption and/or shared parental leave and be paid statutory maternity, paternity, adoption and/or shared parental pay (as appropriate).
  • take parental leave and time off for family emergencies.
  • request flexible working arrangements.
  • rot receive less favourable treatment on account of working under a fixed-term contract.
  • have protection of their employment upon the transfer of a business.

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