Zero-Hours Contracts

Casual 'no guaranteed hours' working: statutory rights, the exclusivity-clause ban, and the Employment Rights Act 2025 guaranteed-hours reforms.

Commercial & Business

UK-wide

Introduction

A zero-hours contract is a casual arrangement under which the employer does not guarantee work and the individual is not obliged to accept it — common for 'on call' and piece work. Zero-hours workers are not outside employment law: they are entitled to the National Minimum Wage and statutory paid annual leave in the same way as regular workers, and since 2015 exclusivity clauses purporting to stop them working elsewhere have been unenforceable (Employment Rights Act 1996, s.27A). The Employment Rights Act 2025 goes much further: Part 1 creates a right to guaranteed hours reflecting hours actually worked over a reference period, rights to reasonable notice of shifts, and payment for cancelled, moved and curtailed shifts, while section 25 cuts the unfair dismissal qualifying period from two years to six months for dismissals taking effect on or after 1 January 2027.

In Brief

Zero-hours workers get the National Minimum Wage (£12.71 for 21+ from April 2026) and statutory paid holiday like any other worker, and exclusivity clauses stopping them working elsewhere are unenforceable (ERA 1996 s.27A). The Employment Rights Act 2025 adds a right to guaranteed hours reflecting hours actually worked, shift-notice and cancellation-pay rights, and — for dismissals taking effect on or after 1 January 2027 — a six-month (not two-year) unfair dismissal qualifying period. Tribunal claims generally must be brought within 3 months.

Core Principles

What a Zero-Hours Contract Is — 'Zero-hours contracts are also known as casual contracts', usually for piece work or on-call work: the worker is on call, the employer does not have to offer work, and the worker does not have to accept it (GOV.UK).

Core Statutory Rights — Zero-hours workers are entitled to statutory annual leave and the National Minimum Wage in the same way as regular workers; the employer remains responsible for their health and safety.

Exclusivity Clauses Banned — Any term of a zero hours contract prohibiting the worker from working under another contract is unenforceable (ERA 1996, s.27A, inserted by the Small Business, Enterprise and Employment Act 2015). A worker can lawfully ignore a clause banning them from looking for or accepting other work.

Status Is Substance, Not Label — Whether someone is an employee or worker depends on the reality of the relationship, not the paperwork (Autoclenz v Belcher [2011] UKSC 41; Uber BV v Aslam [2021] UKSC 5). Many zero-hours staff are 'workers' with minimum wage and holiday rights even if documents say otherwise.

Right to Guaranteed Hours — Part 1 of the Employment Rights Act 2025 ('Zero hours workers, etc') creates a right to guaranteed hours: employers must make a guaranteed hours offer to qualifying workers reflecting the hours worked over a statutory reference period (new ss.27BA onwards ERA 1996). Section 1 was commenced for specified purposes on 6 January 2026 (S.I. 2026/3), with the substantive regime being phased in.

Shift Notice and Cancellation Pay — The 2025 Act also provides rights to reasonable notice of shifts (s.2) and to payment for cancelled, moved and curtailed shifts (s.3).

Six-Month Unfair Dismissal Qualifying Period — ERA 2025 s.25 substitutes 'six months' for 'two years' in ERA 1996 s.108 and removes the statutory cap on the compensatory award (s.124 omitted). It is in force from 1 January 2027 and does not apply where the effective date of termination falls before that date (S.I. 2026/559).

Key Statutes

Employment Rights Act 1996

1996

Small Business, Enterprise and Employment Act 2015

2015

Employment Rights Act 2025

2025

National Minimum Wage Act 1998

1998

Working Time Regulations 1998

1998

Leading Cases

Uber BV v Aslam

[2021] UKSC 5

Autoclenz Ltd v Belcher

[2011] UKSC 41

Pimlico Plumbers Ltd v Smith

[2018] UKSC 29

Carmichael v National Power plc

[1999] 1 WLR 2042

Common Scenarios

Contract bans working for anyone else

Exclusivity terms in zero hours contracts are unenforceable under ERA 1996 s.27A. The law says you can ignore a clause that bans you from looking for work or accepting work from another employer, and your employer cannot lawfully do anything to stop you getting work elsewhere.

Regular hours but no guarantee

A bar worker on a zero-hours contract has worked roughly 30 hours a week for a year. Under Part 1 of the Employment Rights Act 2025, employers must offer qualifying zero- and low-hours workers guaranteed hours reflecting the hours actually worked over the statutory reference period, alongside rights to reasonable shift notice and payment for cancelled or curtailed shifts. Check commencement status — the regime is being phased in from 2026.

Dismissed after eight months, in 2027

A zero-hours employee dismissed with an effective date of termination on or after 1 January 2027 needs only six months' qualifying service to claim unfair dismissal (ERA 2025 s.25, commenced by S.I. 2026/559). For dismissals taking effect before that date, the old two-year qualifying period still applies.

Frequently Asked Questions

Do zero-hours workers get holiday pay and the minimum wage?

Yes. Zero-hours workers are entitled to statutory annual leave and the National Minimum Wage in the same way as regular workers. From April 2026 the minimum wage is £12.71 an hour for those aged 21 and over, £10.85 for 18 to 20-year-olds, and £8 for under-18s and apprentices.

Can my employer stop me working for someone else?

No. Under ERA 1996 s.27A, any provision of a zero hours contract prohibiting you from doing work under another contract is unenforceable. GOV.UK guidance is explicit that you can ignore a clause banning you from looking for, or accepting, work from another employer.

When does the six-month unfair dismissal qualifying period apply?

The Employment Rights Act 2025 s.25 replaces the two-year qualifying period in ERA 1996 s.108 with six months. Commencement regulations (S.I. 2026/559) bring it into force on 1 January 2027, and it has no effect where the effective date of termination falls before 1 January 2027.

What is the new right to guaranteed hours?

Part 1 of the ERA 2025 requires employers to offer qualifying zero- and low-hours workers a guaranteed hours contract reflecting the hours they actually worked over a statutory reference period, with anti-avoidance rules and enforcement through the employment tribunal. The provisions are being commenced in stages — s.1 was partially commenced on 6 January 2026.

Important Deadlines

Employment tribunal claim (e.g. unlawful deduction, detriment, dismissal)Usually within 3 months of your employment ending or the problem happening, after ACAS early conciliation

Six-month unfair dismissal qualifying period takes effectApplies where the effective date of termination is on or after 1 January 2027 (S.I. 2026/559)