Z is for Zero Hours Contracts

Date published: 17th March 2021

ero Hours Contracts

What is a Zero Hour Contract?

A zero hours contract is a contract of employment where:

  • the employer doesn’t have to provide minimum working hours
  • the worker doesn’t have to do any work offered

and may involve

  • waiting at home by the phone to see if the employee is needed to come into work
  • a clause in the contract which states that the working hours for the week will vary and will be determined each Monday morning
  • waiting on work premises to see if there is any work to do.

Is a Person on a Zero Hours Contract an Employee?

People who are on 'proper' zero hours contract are not employees. This is because a 'proper' zero hours contract does not impose any mutuality of obligation between the employer and the worker, as there is no obligation on the employer to provide work and pay and no obligation on the worker to carry out the work. Mutuality of obligation is one of the basic criteria to establish employment status. If there is no mutuality of obligation, the person working under that contract is not an employee.

Problems with Zero Hours Contracts

The problem with zero hours contracts is that the employee is only paid for the time they work, so if they have to wait at home, it is unlikely they will be paid for this, however an employee on a zero hours contract who has to be on site waiting for work to arise, should be paid at the appropriate hourly rate or, at the very least, at the statutory minimum rate.

Likewise when calculating an employee's rights to rest breaks and limited working hours, time spent on call at or near the workplace does count as working time (unless the employee is asleep during this time). The employee should therefore be paid for hours on call and should have them taken into account when calculating their working hours.

The employee cannot count themselves as laid off or put on short time for the periods they're not working, and therefore cannot claim a guarantee payment. This is because guarantee payments are only paid if the employee's contract specifies normal working hours which they're not working, and this would not be the case for an employee with a zero hours contract.

Am I Entitled to Holiday Pay or Statutory Sick Pay?

An employee working under a zero hours contract is entitled to holiday pay, however problems can arise when trying to work out how much holiday a worker is entitled to if they work irregular hours. One way is to calculate the holiday entitlement that accrues as hours are worked.

Someone working under a zero hours contract is entitled to receive statutory sick pay (SSP) provided that they're eligible. See further information on SSP eligibility.

Challenging a Zero Hours Contract

It is a legal requirement that every employee must be given a written statement of their terms and conditions of employment. This statement should include the terms and conditions relating to hours of work, including normal weekly hours (if there are any), any overtime requirements, the scale or rate of pay, and whether pay is weekly, monthly or paid at some other specified interval. Although this statement is not the contract, it is very good evidence of what is in the contract.

If a contract does not specify the number of hours to be worked each week, but merely says that 'hours of work will vary each week', it is still a legal contract.

If an employee on a zero hours habitually works the same number of hours each day or week and this continues over a length of time, it will be easier to argue that there has been an express variation of the contract. For example:

  • the employee always doing the same hours without being asked
  • the employer demonstrating an expectation that the employee will return on a usual day, for example, being told on a Friday 'See you on Monday', so expecting them to return on the Monday
  • any request to vary hours or leave early by the employee being refused
  • the employee having to request the days they're normally expected to work off as holiday
  • getting other people to work the days they're normally expected to work, if the employee is unavailable to work those days.

If it can be established that an employee has been working regular hours and, they are offered no more work although they're willing and available, they may be entitled to be paid for the hours they had come to expect. This is a difficult argument to make and the employee will need to seek specialist advice. A good place to start is the Advisory, Conciliation and Arbitration Service (ACAS) who provide employment advice to both employees and employers. Contact the ACAS helpline on 0300 123 1100, lines open Monday to Friday, 8am to 6pm

CARF can also give you information on your rights, and advice and assistance to help you to solve problems at work. Contact our General Advice Helpline on 0345 140 0095 or Text Service for the Deaf Community 0787 2677904. Lines open 8.30 am to 4 pm, Monday to Friday.


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