What is a Zero-Hours Contract?
A zero-hours contract is an employment arrangement where an employer is not required to provide guaranteed working hours, and workers are only paid for actual hours worked. While these contracts can provide operational flexibility for businesses in industries with unpredictable demand, such as hospitality and retail, they present significant compliance challenges and worker protection concerns.
Critical compliance note: Zero-hours contracts are banned or heavily restricted in most countries worldwide due to concerns about worker exploitation and income instability. Organisations must carefully assess legal requirements before considering any flexible employment arrangements.
Legal status and regulations
Zero-hours contracts refer to employment agreements where employers are not obligated to provide any minimum number of working hours, and employees are not required to accept work offered. These arrangements are found in sectors with fluctuating labor demands, such as hospitality, retail, and healthcare.
However, the majority of countries worldwide either ban or heavily regulate these contracts due to documented concerns about worker exploitation, income instability, and lack of employment security. Ireland implemented a near-total ban on zero-hours contracts in March 2019, except in limited circumstances. While the UK remains the primary jurisdiction where these contracts are still legal, recent legislative reforms demonstrate growing recognition of worker protection needs.
Zero-hours contract in global HR
Zero-hours contracts refer to employment agreements that do not guarantee a specific number of working hours for employees, nor do they compel employees to accept every work offer. These contracts offer substantial flexibility and are a common feature in industries such as hospitality and retail, where labour needs can fluctuate significantly.
Global regulatory landscape
The legal status and regulation of zero-hours contracts vary dramatically across different regions and countries worldwide.
Europe:
- Banned or heavily restricted: Austria, Belgium, Czech Republic, Denmark, France, Germany, Hungary, Italy, Netherlands, Poland, and Spain.
- Netherlands: Zero-hours contracts will be completely banned effective January 1, 2027
- Germany: Cannot enter into valid zero-hours contracts; requires either specified working hours or "work on demand" arrangements with strict employee protections.
- EU Framework: EU Directive 2019/1152 on Transparent and Predictable Working Conditions provides enhanced worker protections across member states.
Countries where they remain legal:
- United Kingdom (with recent reforms) and some Scandinavian countries (with variations - Sweden typically requires collective bargaining agreements).
Zero-hours contracts beyond Europe
North America:
- United States: No specific federal legislation on zero-hours contracts, but similar "on-call" arrangements exist. Regulations vary significantly by state, with some states implementing "predictive scheduling" laws requiring advance notice of shifts.
- Canada: Similar to the US, regulations depend on the province. Zero-hours contracts are generally legal but some provinces have introduced predictability requirements.
Asia-Pacific:
- Australia: Zero-hours contracts are legal with some minimum standards. "Casual employment" is common, with casual work rules introducing minimum protections including reasonable notice for shifts and sometimes minimum payment periods.
- New Zealand: Zero-hours contracts were completely banned in 2016 following concerns about exploitation and are no longer permitted.
- Singapore: The Employment Act doesn't explicitly regulate zero-hours contracts, but standard working condition requirements may apply.
Other Regions:
- United Arab Emirates: Formal zero-hours contracts are not specifically prescribed by law, but UAE labor law governs working conditions.
- South Africa: Not explicit in local law, but labor standards may indirectly restrict true zero-hours arrangements.
How zero-hours contracts work
Zero-hours contracts create an employment relationship without guaranteed working hours. Employers notify workers of available shifts, which workers may accept or decline. However, this arrangement creates inherent power imbalances and economic uncertainties for workers.
Key risks and challenges
- Income unpredictability: Workers cannot predict their earnings, making financial planning difficult.
- Limited worker protections: Reduced access to traditional employment benefits and job security.
- Potential for exploitation: Risk of punitive treatment for workers who decline shifts.
- Economic vulnerability: Workers may feel pressured to accept unfavourable conditions due to a lack of alternatives.
The operation of such contracts has led to widespread regulatory responses globally, with most jurisdictions implementing bans or restrictions to protect worker welfare.
Worker protection standards
In jurisdictions where zero-hours contracts remain legal, various protection standards have emerged:
- Enhanced information rights: Complete information about employment conditions, including reference hours and days when workers may be called.
- Right to refuse: Ability to refuse work assignments outside previously defined reference hours without adverse consequences.
- Transition rights: Right to request more predictable and secure working conditions after a qualifying period.
- Notice requirements: Reasonable advance notice before shifts and compensation for cancelled assignments.
- Anti-exploitation measures: Minimum payment guarantees and protection against abusive practices.
Key compliance considerations
- Legal restrictions: Zero-hours contracts are only legally viable in a small number of countries, with the majority of jurisdictions worldwide prohibiting or heavily restricting their use due to worker protection concerns.
- Regulatory compliance: In jurisdictions where any form of on-demand work exists, employers must navigate complex requirements designed to prevent exploitation and ensure fair treatment.
- Worker rights: Even where legal, workers typically retain rights to fair compensation, reasonable notice, and protection from discriminatory treatment for declining work assignments.
- Documentation requirements: Employers must provide comprehensive information about working conditions, reference hours, and compensation structures to ensure transparency.
- Ethical considerations: Organisations must weigh operational flexibility against their responsibility to provide stable, fair employment conditions that support worker wellbeing.
Technical aspects
Within the framework of zero-hours contracts, technical elements include:
Legal compliance: Abiding by labour laws specific to each jurisdiction is crucial.
For global operations, this means understanding that most countries prohibit these contracts entirely.
Where they remain legal, such as in the UK, recent reforms through the Employment Rights Bill 2024 target "exploitative" practices by introducing rights to request predictable hours, guaranteed notice of shift changes, and compensation for cancellations, rather than implementing an outright ban.
International regulatory compliance: In countries with specific worker protection frameworks (such as EU Directive 2019/1152), employers must comply with enhanced requirements including:
- Providing comprehensive written information about working conditions
- Specifying reference hours and days for potential work
- Offering compensation for cancelled shifts
- Implementing fair transition pathways to more secure employment
Shift allocation: Employers must have systems to efficiently manage and allocate shifts, ensuring fair distribution based on employee availability and skill sets, whilst providing the legally required notice periods.
Employee rights: Employees must be informed of their rights under these contracts, which vary significantly by country. Jurisdictions with worker protection frameworks provide enhanced safeguards against exploitation and rights to transition to more secure employment.
Compensation systems: Implementing accurate systems to track hours and compensate employees promptly and fairly is vital to prevent disputes and ensure regulatory compliance. Many jurisdictions require compensation for "on-call" time and cancelled shifts.
By understanding the complexities surrounding zero-hours contracts, businesses can better navigate the balance between operational efficiency and fair employment practices, all whilst adhering to legal obligations and ethical standards across different jurisdictions.
Compliance-first approach
Organisations considering flexible employment arrangements must prioritise legal compliance and worker protection. Most importantly, verify that zero-hours contracts are legal in your target jurisdiction, as they are prohibited in the majority of countries worldwide.
Compliance assessment framework
- Legal verification: Before any implementation, confirm the legal status in each target country. Engage local employment law expertise to understand restrictions and requirements.
- Risk assessment: Evaluate the potential impact on worker wellbeing, company reputation, and regulatory compliance before proceeding with any flexible arrangements.
- Alternative solutions: In countries where zero-hours contracts are banned, explore compliant alternatives such as part-time contracts with minimum guaranteed hours or other arrangements that provide both flexibility and worker security.
- Documentation standards: Ensure all employment arrangements meet local transparency requirements and provide workers with comprehensive information about their rights and working conditions.
- Monitoring systems: Implement robust systems to track compliance with notice requirements, compensation obligations, and worker protection standards.
- Regular review: Continuously assess arrangements against evolving regulations and best practices to ensure ongoing compliance and ethical employment practices.
Best practices for ethical employment
- Prioritise worker wellbeing: Always consider the impact of employment arrangements on worker financial security and wellbeing.
- Stay current with regulations: Maintain up-to-date knowledge of changing regulations across all operating jurisdictions to ensure compliance.
- Seek compliant alternatives: In countries where zero-hours contracts are banned, work with employment law experts to develop fair, flexible arrangements that protect employee rights.
- Transparent communication: Maintain clear, honest communication about working conditions, expectations, and employee rights.
- Regular compliance audits: Continuously review employment practices against legal requirements and ethical standards.
- Employee-centric approach: Design employment arrangements that balance business needs with fair treatment and job security for workers.
Zero-hours contract over time
About this timeline
This timeline highlights key developments and changes in zero-hours contracts, particularly focusing on their use in the United Kingdom and broader global regulatory evolution. These contracts allow flexibility for employers and employees but also introduce challenges regarding job security and working conditions. Let's explore how they've evolved over time.
2015 | Ban on exclusivity clauses (UK)
In 2015, the UK government banned exclusivity clauses in zero-hours contracts. This change allowed employees to work for multiple employers at once, providing them more freedom and financial flexibility. This was a significant move to empower workers who otherwise had restrictions despite no guaranteed work from a single employer.
2019 | Global worker protection developments
Various jurisdictions began implementing enhanced worker protection frameworks, including the EU's Directive on Transparent and Predictable Working Conditions. Ireland implemented a near-total ban on zero-hours contracts in March 2019, except in limited circumstances. This represented a global shift toward addressing the risks of variable work schedules and providing greater worker security.
2022 | Enhanced worker protection implementation
Multiple jurisdictions implemented enhanced protections for workers in precarious employment, including those on zero-hours contracts where they remain legal. This represented a global trend toward greater worker security and transparency.
2024 | Employment rights bill reforms (UK)
In 2024, the UK introduced the Employment Rights Bill, targeting "exploitative" zero-hours contract practices rather than implementing an outright ban. This legislation introduced rights to request predictable hours for workers who regularly work consistent patterns, required reasonable notice for shift changes, and mandated compensation for last-minute cancellations. Research showed that 84% of zero-hours workers would prefer guaranteed hours. These reforms aimed to provide more stability and predictability while maintaining flexibility for both employers and workers.
2025-2026 | Implementation of UK reforms
The UK Employment Rights Bill reforms are expected to take effect in Autumn 2026, implementing new rights for zero-hours workers, including contracts reflecting actual hours worked and more predictable terms, rather than a complete prohibition. As these changes take effect, they are predicted to improve financial security and reduce the potential for exploitation by standardising working conditions in industries dependent on flexible labour arrangements.
2027 | Netherlands complete ban
The Netherlands will implement a complete ban on zero-hours contracts effective January 1, 2027, requiring employers to offer basic contracts reflecting the minimum hours employees typically work.
Looking ahead
The global evolution of employment law continues to move towards enhanced worker protections and away from arrangements that create economic instability. The worldwide trend is towards greater regulation or complete elimination of zero-hours contracts. Organisations should prepare for continued regulatory tightening and focus on developing sustainable, ethical employment practices that provide both operational flexibility and worker security.
How Boundless can help
Managing employment arrangements globally requires careful attention to the complex and varied legal landscape surrounding zero-hours contracts. Given that most countries worldwide ban or heavily restrict these contracts, Boundless provides compliant employment solutions that prioritise both regulatory adherence and positive employee experiences across all jurisdictions.
- Global compliance expertise: We navigate complex international regulatory environments, ensuring your employment arrangements comply with local laws through compliant alternatives that meet your flexibility needs whilst protecting workers.
- Employee-centric solutions: Our employment solutions prioritise the employee experience, providing predictable working arrangements, fair compensation structures, and transparent terms that build trust and engagement across your global workforce.
- Regulatory intelligence: Stay current with rapidly evolving employment legislation worldwide, including upcoming changes and emerging global trends in flexible work arrangements.
Please visit our country guides to learn more about the employment rules in each country. With Boundless, achieving compliance and operational efficiency across multiple global jurisdictions becomes straightforward whilst ensuring positive employee experiences.
