Zero Hours Contract Template - ERA 2025 Compliant
A clean zero-hours contract that respects the exclusivity ban, applies rolled-up holiday at 12.07% in line with the Working Time (Amendment) Regulations 2023, and anticipates the 2027 right to guaranteed hours under the Employment Rights Act 2025.
When zero-hours arrangements are appropriate
Zero-hours contracts work best for genuinely variable demand: hospitality cover, events staffing, retail peaks, ad-hoc consulting. They're inappropriate where the worker is in practice expected to be available - a regular weekly shift pattern dressed up as zero hours can attract employee status and the associated unfair-dismissal protection regardless of the label.
Legal requirements for a compliant zero-hours contract
- No exclusivity clause - Exclusivity Terms in Zero Hours Contracts (Redress) Regulations 2015 make any such clause unenforceable.
- National Minimum Wage / National Living Wage - must be met for every hour worked (National Minimum Wage Act 1998).
- Holiday entitlement - 5.6 weeks pro rata, accrued at 12.07% of hours worked. Rolled-up holiday pay is permitted under the Working Time (Amendment) Regulations 2023, provided it's shown separately on the payslip.
- Pension auto-enrolment - workers earning above the threshold (£10,000/year for 2024-25) must be enrolled (Pensions Act 2008).
- No mutuality of obligation - neither party obliged to offer or accept work.
- Itemised pay statements - required from day one (Employment Rights Act 1996 s.8).
- Equality and whistleblowing protection - apply equally to workers as to employees.
2026 / 2027 changes under the Employment Rights Act 2025
The Employment Rights Act 2025 introduces material reforms to zero-hours and irregular-hour working that bite from 2027:
- Right to guaranteed hours - irregular-hours workers will be able to request a contract reflecting hours actually worked over a 12-week reference period.
- Reasonable notice of shifts - workers must receive reasonable notice of shifts and changes.
- Compensation for cancelled or shortened shifts - payable when notice is short.
- Day-one rights from February 2026 - paternity leave and unpaid parental leave become day-one rights and apply to qualifying workers.
- Enhanced SSP from April 2026 - Statutory Sick Pay payable from day one with no lower earnings limit.
Lexara's template references each change with the correct commencement date, applying it only when the contract begins on or after that date.
Worker vs employee status
A zero-hours arrangement typically creates "worker" status - a category that sits between self-employed and employee under the Employment Rights Act 1996 s.230. Workers have most statutory rights (NMW, holiday, pension, anti-discrimination, whistleblowing) but not unfair-dismissal protection or statutory redundancy pay.
If the day-to-day reality is that the "worker" is required to attend regular shifts, accept all offered work, and integrate into the employer's organisation, an employment tribunal can re-classify them as an employee - with all the consequences that follow. The contract is the starting point; the working relationship is what counts.