Zero-hours contracts: Understanding the law

A typical workforce is made up of a variety of working arrangements. From permanent employees, who form the core of an employer’s workforce, to self-employed contractors, who work on one-off projects and invoice for fees. The types of working relationship which lie in-between include office-holders, fixed-term employees, agency workers, purchased/managed service staff, and interns. These are all forms of atypical working, which is a pattern of work that’s outside the scope of the 'traditional set-up' of a full-time employee working under an employment contract for a single employer. 

Working under a casual labour contract is also a form of atypical working, although this covers many different types of working arrangement. For example, “casual labour” could refer to people working on short-hours contracts, annualised hours contracts and zero-hours contracts. This guidance addresses zero-hours contracts only.  

Zero-hours contracts have come under criticism from worker organisations who claim that the lack of security they provide is detrimental to workers or employees working under them. 

CIPD research into zero-hours contracts highlights the wide range of working arrangements that fall under this broad umbrella term. One reason for this is that “zero-hours contract” is not a legal term. 

The CIPD's research and this guide define a zero-hours contract as:  

“An agreement between two parties that one may be asked to perform work for the other, but there is no set minimum number of hours. The contract will provide what pay the individual will get if he or she does work and will deal with the circumstances in which work may be offered (and, possibly, turned down).”  

Organisations considering using zero-hours contracts should think about the business rationale for doing this, including whether there are other types of flexible working or employment practices that would deliver the same benefits. 

This guide is produced in collaboration with law firm Lewis Silkin. The guide aims to help employers ensure that they are using zero-hours contracts responsibly, as well as making clear the legal implications of using these contracts.