Zero Hours Contracts in the UK: What Employers Really Need to Know
Zero hours contracts are everywhere in UK business, from hospitality to healthcare, but they’re also one of the most misunderstood tools in employment. For founders and business owners, they can be a lifesaver when you need flexibility. But get them wrong, and you’re looking at tribunal claims for unlawful deductions, unfair dismissal, or holiday pay arrears.
Here’s the no-fluff guide to zero hours contracts in 2025.
What Legally Makes a Zero Hours Contract?
A zero hours contract is a contract where the employer is not obliged to offer any minimum hours of work, and the individual is not obliged to accept the work offered. It’s a two-way flexibility model.
But in practice, most zero hours staff do work fairly regular shifts…which is where legal risks creep in.
Worker Status: Employee, Worker, or Self-Employed?
This is the biggest grey area. Someone on a zero hours contract is usually classed as a “worker” under the Employment Rights Act 1996, which means they have rights to:
National Minimum Wage
Paid annual leave
Protection from unlawful deductions
Rest breaks and working time protections
They’re usually not employees, which means no protection from unfair dismissal or redundancy pay. However — if you’re giving someone consistent, long-term hours, tribunals can (and do) find that the individual is in fact an employee, regardless of the “zero hours” label.
They’re rarely treated as self-employed, unless they truly control how/when they work and can send a substitute.
Can I Just Give Someone a Zero Hours Contract Even If They Work More?
Yes, you can issue a zero hours contract. But if someone regularly works fixed hours, a tribunal may say that the reality of the relationship trumps the paperwork. That means:
If someone has worked 40 hours a week for 18 months, a tribunal is likely to find they’re an employee, not a casual worker.
Calling it “zero hours” won’t save you from obligations around redundancy, unfair dismissal, or continuity of service.
Why Are Zero Hours Contracts Controversial?
Zero hours contracts divide opinion:
Critics say they’re exploitative, leaving workers without guaranteed income or security.
Supporters argue they give much-needed flexibility: for students, carers, or employers in seasonal industries and second jobs/gigs.
High-profile employers have faced reputational damage for over-using them, particularly when staff are effectively “employees in all but name” but without the benefits.
Are Zero Hours Contracts Going to Be Made Illegal?
No, at least not at the moment. Despite regular headlines, zero hours contracts are still legal in the UK in 2025. The key reform already in place: exclusivity clauses are banned. You can’t stop a zero hours worker from working elsewhere to top up their hours.
There’s political debate about whether tighter regulation or a right to request a predictable contract should be introduced. Watch this space.
Holiday Pay for Zero Hours Contracts
Yes, zero hours workers get paid holiday. It’s not optional.
They are entitled to 5.6 weeks’ paid leave per year (pro-rated).
Holiday pay is calculated using the 52-week average pay reference period (looking at actual hours worked, up to 104 weeks if there are weeks with no work).
Since January 2024, employers can lawfully use rolled-up holiday pay for irregular/part-year workers, provided it is shown clearly on payslips.
Failure to get this right is one of the most common causes of unlawful deduction claims.
Other Key Points for Employers
Continuity of service: Even on a zero hours contract, gaps shorter than one full week may not break continuity, which matters for unfair dismissal rights.
Discrimination law applies: Zero hours workers are still protected under the Equality Act 2010.
Record-keeping is critical: Keep accurate logs of hours and pay — HMRC and tribunals will expect evidence.
Zero Hours in Real Life: How Practices Across the West Midlands Are Using Them
Zero hours contracts can feel abstract until you see them in action. Across the West Midlands, practices are already experimenting, and not just in theory, but on the ground in surgeries, clinics and call centres.
One Birmingham city-centre GP surgery I spoke with uses a small bank of zero hours receptionists to cover winter pressure clinics. Instead of dragging salaried staff into overtime or scrambling for temps, they’ve built their own pool of “on call” admin support. Patients see familiar faces. Managers save their budgets.
Dental practice managers across Coventry, Meriden and Solihull spoke about how they often struggle when school holidays hit: suddenly demand spikes, and so does staff absence. By keeping hygienists and nurses on zero hours, they can flex capacity without breaking the bank on agency cover.
Independent opticians in Dudley and Wolverhampton are using zero hours optometrists to run Saturday testing clinics. It’s cheaper than paying locum rates every weekend, and the same professionals come back week after week, giving patients continuity.
Rural practices in Herefordshire and Warwickshire have leaned on zero hours admin and call handlers during vaccination drives. It’s not glamorous, but when phones melt down during flu season, having trained people on a zero hours basis beats burning out your permanent team.
Zero Hours vs Locum: Not Either/Or
Locums will always have a role — especially for long-term GP absence or specialist sessions. But zero hours contracts give practice managers another lever: cheaper, more predictable, and rooted in local people who know your patients and systems. Think of them less as “cheap labour” and more as a way to build your own in-house flex pool.
The Watchouts
If your “zero hours” nurse is doing the same Tuesday and Thursday clinic every week, don’t kid yourself — a tribunal will likely see them as an employee.
Holiday pay applies. Always. It’s calculated on the 52-week average, and ignoring it is the fastest route to an unlawful deduction claim.
Exclusivity clauses are banned — don’t try to lock zero hours workers in. If they want to do a Saturday clinic for you in Sutton Coldfield and a Sunday clinic in Coleshill or Water Orton, that’s their right.
👉 For practice managers, clinical settings and pharmacies across the West Midlands, zero hours contracts aren’t a dirty word — they’re a practical tool. Use them honestly, get the paperwork right, and they can save you from the locum lottery. Abuse them, and you’re buying yourself a tribunal claim.
Thrive Takeaway
Zero hours contracts aren’t illegal. They’re not automatically exploitative. But they are risky if used as a shortcut for poor workforce planning.
If you rely on zero hours contracts, make sure:
They’re genuinely casual, not back-door full-time roles.
You get holiday pay right.
You’re honest with your team about what flexibility really means.
Done properly, zero hours can give you flexibility without landing you in tribunal. Done badly, they’re just a lawsuit in waiting. Give me a call if you need a hand with where to start.
Quick FAQ’s
Are zero-hours contracts legal in the UK? Yes, if minimum wage and holiday pay rules are met and terms are fair.
Do zero-hours staff get holiday pay? Yes — accrued based on hours worked (rolled-up pay is lawful for irregular/part-year workers if shown clearly).
Can we require exclusivity? No — exclusivity clauses for zero-hours workers are prohibited.
Do we have to pay if we cancel a shift? Not by statute in most cases, but set fair cancellation rules in writing to avoid disputes.
