Zero-Hours Contracts: Rights, Responsibilities, and Best Practices

Zero-hours contracts are common in hospitality. They offer flexibility for businesses and workers alike. But they also come with specific legal rules that employers must follow.

Get it wrong, and you could face an employment tribunal. Get it right, and zero-hours contracts can be a fair and effective way to manage flexible staffing.

What Is a Zero-Hours Contract?

A zero-hours contract is a contract of employment that does not guarantee any minimum hours. The employer offers shifts when work is available. The worker can accept or decline them.

This flexibility is the main advantage. But it is also the source of most disputes.

Workers’ Rights

Zero-hours workers are still workers. They have the same basic rights as any other employee, including:

• The National Minimum Wage
• Paid holiday leave (pro-rated)
• Protection against discrimination
• Protection against unlawful deduction of wages

Crucially, zero-hours workers are entitled to holiday pay. This is calculated as a percentage of the hours they work. Many employers get this wrong, either by not paying it or by paying it incorrectly.

Exclusivity Clauses Are Banned

Since 2015, exclusivity clauses in zero-hours contracts have been banned in the UK. You cannot stop a zero-hours worker from working for another employer.

Some contracts still include these clauses. They are unenforceable. Remove them from your contracts if they are still there.

Best Practices

Provide Clear Contracts

The contract should clearly state that there is no minimum hour guarantee. It should also explain how shifts are offered, how holiday pay is calculated, and how the contract can be ended.

Offer Shifts Fairly

Do not penalise workers for declining shifts. If you only offer shifts to people who never say no, you are effectively creating a unfair system. Zero-hours means zero obligation on both sides.

Keep Records

Keep accurate records of hours worked and holiday pay accrued. This protects you if a dispute arises.

Consider Regular Hours

If someone has been working regular hours for several months, they may have a claim for implied regular hours. Consider moving them to a fixed-hours contract if their pattern is consistent.

The Bottom Line

Zero-hours contracts are a legitimate and useful tool. But they must be used fairly. Know the law, provide clear contracts, and treat your zero-hours workers the same way you treat your permanent staff.