A zero hours contract is an agreement where the employer doesn't have to give any minimum working hours and the person doesn't have to accept work offered. Zero hours staff still get the National Minimum Wage, statutory annual leave and other rights, and under the Employment Rights Act 1996 employers can't stop them working for someone else.
Zero hours contracts work well for seasonal peaks, students and on-call work. They go wrong when they're used to run the core business or to dodge rights. Here's what GOV.UK and Acas say employers must and shouldn't do.
What a zero hours contract is
GOV.UK says zero hours contracts are also known as casual contracts and are usually for piece work or on-call work, such as interpreters. Acas adds that employers often use them in sectors with variable demand: casual hours for students in the holidays, and gig economy work such as food delivery and car rides. A zero hours contract can be one ongoing contract or a series of short contracts each time someone works.
Employee or worker: the question that decides rights
This is the insight most small employers miss. Acas says someone on a zero hours contract can legally be an employee or a worker, and their rights depend on that employment status, not on the contract's name.
| Right | Worker on zero hours | Employee on zero hours |
|---|---|---|
| National Minimum Wage | Yes | Yes |
| Statutory annual leave | Yes | Yes |
| Unfair dismissal claim | No | Yes, with the qualifying service |
| Redundancy pay | No | May be offered, depending on service |
| Statutory notice | No legal requirement unless the written statement says so | Follows the employee notice rules |
Acas says employers must make it clear whether someone is an employee or a worker, and tell them what their rights are to things like sick pay, holiday and redundancy pay.
The exclusivity ban
By law, under the Employment Rights Act 1996, an employer must not put an exclusivity clause in a zero hours contract to stop someone working for another employer. GOV.UK says the worker can ignore any such clause. Acas adds that you also can't treat them unfavourably, or dismiss them, for working for someone else. The same protection now covers low earners too: Acas says employers must not use exclusivity clauses for workers whose average weekly income is at or below the lower earnings limit, which is £129 a week as of October 2026.
Breaks in service
Continuity matters because many rights build up with unbroken service. Acas says that if someone isn't given work for a full calendar week, seven consecutive days from Sunday to the following Saturday, that usually counts as a break in employment. There are exceptions, such as up to 26 weeks off sick or injured, seasonal or academic work that regularly pauses, or an agreed career break. If you run short contracts, keep records of who worked which weeks.
Notice, redundancy and ending the arrangement
The notice rules depend on status again. Acas says employees on zero hours contracts follow the normal notice rules for employees, while for workers there's no legal requirement on either side to give notice; if you want one, it has to be in the written statement. During any notice period, the working arrangement stays the same as normal. On redundancy, employees on zero hours contracts may be offered it, workers aren't entitled to it, and Acas notes that some employers simply stop offering hours instead. If you do that with an employee who has the qualifying service, you could still face a redundancy or unfair dismissal claim, so take advice before going quiet on someone.
What employers must do
- Give all statutory employment rights, with no exceptions.
- Pay at least the National Minimum Wage, however many hours are offered or worked.
- Pay wages through PAYE, with tax and National Insurance deducted.
- Make clear whether each person is an employee or a worker.
- Pay any holiday built up and not taken when the contract ends, unless rolled-up holiday pay applies, plus any outstanding wages.
- Keep looking after their health and safety, which GOV.UK says remains your responsibility.
Good practice, and when not to use them
Acas says a responsible employer should make clear that work isn't guaranteed and can end quickly, that the person doesn't have to accept work, and that there's a fair process for sharing out work. It also recommends a clear policy on cancelling work, with the notice you'll give and any compensation. Acas says employers shouldn't use zero hours contracts if someone is needed for regular hours over a continuous period, to avoid giving rights, or to run the core business rather than manage peaks.
What's coming next
The government has consulted on reforms under its Make Work Pay plans, including a right to guaranteed hours based on regular working patterns. Acas submitted its response on 25 August 2026 and urged the government to keep the qualifying rules simple. The detail wasn't settled when I checked in October 2026, so treat this as a change to plan for, not a rule in force.
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My verdict
Zero hours contracts are lawful and useful, but they aren't a way round employment law. The person still gets the minimum wage, holiday and protection from exclusivity clauses, and if they're an employee, much more. Use them for peaks, not the core team, write down whether each person is a worker or an employee, and get ready for guaranteed hours rules.
Frequently asked questions
What is a zero hours contract?
A contract where the employer doesn't have to offer any minimum hours and the person doesn't have to accept work offered. It's also known as a casual contract.
Do zero hours workers get holiday pay?
Yes. GOV.UK says zero hours workers are entitled to statutory annual leave and the National Minimum Wage in the same way as regular workers.
Can a zero hours contract stop you working elsewhere?
No. Exclusivity clauses are banned for zero hours contracts, and the worker can ignore one.
Is someone on a zero hours contract an employee?
They can be an employee or a worker. Their rights depend on their employment status, not on the contract type.
Does a week without work break continuous employment?
Usually, if no work is given for a full calendar week from Sunday to Saturday, though there are exceptions such as sickness of up to 26 weeks.
Are zero hours contracts being banned?
Not outright. The government consulted on reforms including a right to guaranteed hours, and the detail wasn't settled as of October 2026.
