Employee Rights Under a Zero Hours’ Contract

Several clients have recently asked me: “What rights does someone have under a zero hours contract?” It’s an important question if you’re considering whether this arrangement suits your business.

What is a Zero Hours’ Contract?

A zero hours’ contract is an agreement where no minimum working hours are guaranteed. Instead, individuals are offered work as and when it is available, and they can choose whether to accept it.

For employers, these contracts provide a flexible pool of staff without relying on agencies. For individuals, they offer choice and control over when they work.

Key Feature

• A zero hours contract can apply to both workers and employees.

• Everyone engaged under this type of contract is entitled to certain basic statutory rights, including:

• Payment at or above the National Minimum Wage

• Paid annual leave

• Rest breaks

• Protection from discrimination and unfair treatment (including for part-time working)

• Those who meet the legal definition of an employee have additional rights, such as protection against unfair dismissal and the ability to claim redundancy pay (after the two-year qualifying period).

What Rights Apply in Practice

The rights depend on the individual’s employment status:

• If classed as a worker – they are entitled to:

• Written terms of employment provided no later than their first day

• Payslips

• National Minimum Wage, rest breaks, paid annual leave, and legal protection against discrimination

·       If classed as an employee – they receive all of the above, plus:

o   Family-related leave (maternity, paternity, adoption, etc.)

o   Minimum notice periods

o   Statutory redundancy pay and protection against unfair dismissal (after qualifying service)

Additional Considerations for Employers

• Workplace Pension – If a zero hour worker is aged between 22 and State Pension age and earns £10,000 or more per year, you must auto-enrol them into a workplace pension scheme.

• Annual Leave – Individuals are entitled to 5.6 weeks’ paid holiday per year. For irregular hours, holiday pay is calculated based on their average earnings over the previous 52 weeks in which they worked.

Final Thoughts

Zero hours contracts can provide flexibility for both employers and staff, but it’s vital to apply the correct rights depending on whether someone is a worker or an employee. Getting this wrong can lead to disputes or penalties, so ensuring contracts and policies are clear from the start is essential.