Setting up a genuine zero-hours arrangement correctly means confirming there is no mutuality of obligation, getting holiday accrual right from the first shift, and putting written terms in place before work starts rather than after. Get any one of those three wrong and the arrangement can end up being treated as something other than what you called it. This article is for the point where you are actually setting the relationship up, not for the point where an exclusivity clause or a status dispute has already gone wrong.
> Quick answer: A correctly set up zero-hours arrangement has no obligation on the employer to offer work and no obligation on the worker to accept it, written terms confirming that from the outset, and holiday that accrues on hours actually worked under the Working Time Regulations 1998. Skipping the written statement or building in disguised obligation are the two most common ways a genuinely casual arrangement stops being one.
Start with mutuality of obligation, because everything else depends on it
A zero-hours contract is legally defined as an arrangement where the employer is not obliged to offer work and the worker is not obliged to accept it when offered, with no certainty that any work will be made available at all. That absence of mutual obligation, often shortened to "no mutuality of obligation", is not a minor technical detail. It is the entire legal basis for calling the arrangement zero-hours rather than part-time or casual employment with guaranteed hours.
The practical test for whether this genuinely holds is straightforward, even if applying it honestly is not always comfortable. If a worker who declines a shift faces any real consequence, being offered fewer shifts going forward, a difficult conversation, an implied expectation that they will "make it up" another week, mutuality is creeping back in even though the contract says otherwise. If the business in practice always offers roughly the same hours and the worker always accepts them, that pattern itself is not automatically fatal, but the contract and the actual practice both need to leave room for either side to say no without penalty. Setting the arrangement up correctly means being honest with yourself about which of these two situations you actually run, not just about which one the contract describes.
The written terms have to exist, and they have to say the right things
Employment Rights Act 1996 s.1 requires a written statement of employment particulars for workers and employees, and this applies to zero-hours workers just as it does to anyone else, generally due from the first day of the arrangement. For a zero-hours worker specifically, the written statement should say plainly that there is no guaranteed minimum number of hours, that work is offered on an as-available basis, and that the worker is under no obligation to accept any particular offer of work. It should also cover the rate of pay, how and when it is paid, and how shifts are actually offered and confirmed, whether that is a rota, a message, or a booking system.
Skipping the written statement, or handing over something generic that does not actually describe the casual, no-obligation nature of the role, is one of the most common ways a zero-hours arrangement gets set up badly from day one. A worker with no written terms describing the arrangement as casual has a stronger argument, if a dispute ever arises, that the reality was something closer to guaranteed part-time work.
Holiday accrues, even though hours do not
A genuine misconception with zero-hours workers is that because there are no guaranteed hours, there is no holiday entitlement either. That is wrong. Zero-hours workers are workers, and workers accrue statutory holiday under the Working Time Regulations 1998, currently 5.6 weeks a year, in the same way any other worker does. The difference for a zero-hours worker is how that accrual is calculated, since it has to be based on hours actually worked rather than a fixed weekly pattern.
For irregular hours workers, the calculation method has been the subject of specific government guidance because a fixed weekly allowance does not fit an arrangement where hours vary from week to week or do not exist at all in some weeks. Rather than guessing at a formula, check the current gov.uk guidance on calculating holiday entitlement for irregular hours and part-year workers before setting the mechanism in the contract, and build the same method into how pay is actually calculated and paid, since a zero-hours contract that promises accrual but never operationalises it is not meaningfully different from one that omits the promise altogether.
Sequencing the setup properly
Doing this correctly, in order, looks like this. First, confirm honestly that the arrangement is genuinely casual, with no disguised obligation on either side. Second, put the written statement of particulars in place before the first shift, stating plainly that hours are not guaranteed and covering pay and how shifts are offered. Third, build in the holiday accrual mechanism from the outset, based on hours worked, rather than treating it as something to sort out once a worker actually asks for time off. Fourth, keep a record of shifts offered and worked, since that record is what supports both the holiday calculation and, if it is ever questioned, the genuinely casual nature of the arrangement.
Zero-hours setup checklist
| Step | What it requires |
|---|---|
| Mutuality of obligation | No obligation to offer or accept work, in both the contract and in practice |
| Written statement | In place from day one, per Employment Rights Act 1996 s.1, stating hours are not guaranteed |
| Pay terms | Rate, timing and how shifts are offered and confirmed |
| Holiday accrual | Based on hours actually worked, under the Working Time Regulations 1998 |
| Record keeping | Shifts offered, shifts worked, and holiday accrued, kept consistently |
What this arrangement does not include
This article does not repeat the clause-by-clause content already covered in our zero-hours contract template guide. Setting up a zero-hours worker correctly is a distinct question from what an employer can and cannot restrict once the arrangement is running. In particular, an employer cannot lawfully stop a zero-hours worker from taking on other work, a point that surprises many employers who assume exclusivity is theirs to insist on the same way it might be in a full-time role. That restriction, and what it means in practice, is covered fully in our companion piece on whether you can stop a zero-hours worker taking another job, which is worth reading before finalising the contract terms, since attempting to include an exclusivity clause is one of the more common mistakes in a zero-hours setup.
Putting it into a signed, tracked document
Once the mutuality position, pay terms and holiday mechanism are settled, our guide on drafting a zero-hours contract with AI covers building it through AI Legal Drafting, a live feature that assembles vetted England and Wales clauses rather than generating new legal wording, the same assembled-versus-invented distinction worth knowing before you rely on the output, built from a template that reflects the genuinely casual structure rather than a generic employment contract with the hours removed. Treat the draft as a strong starting point rather than the final word, particularly where the working pattern is unusual. Send the finished contract for e-signature: electronic signatures are admissible for most commercial documents in England and Wales, with exceptions including deeds, wills, land transfers and lasting powers of attorney, so a zero-hours contract signs cleanly this way. Keep the signed document in the same rooms as the rest of your workforce paperwork, with page-by-page analytics confirming the worker actually opened and read the terms before signing, and track the arrangement in your contract register if it runs for a defined period or is due a review date.
This article is written for England and Wales, where the Employment Rights Act 1996 and the Working Time Regulations 1998 set the framework described above. If you are setting up casual work elsewhere, these specific statutes will not apply, but the underlying questions, is there genuinely no mutual obligation, are the written terms in place, and how does holiday or its local equivalent accrue, are the same checklist to hold your own jurisdiction's version against.
Frequently asked questions
What makes a contract genuinely zero-hours rather than casual part-time work?
The absence of mutuality of obligation. The employer has no obligation to offer work and the worker has no obligation to accept it, with no certainty that any work will be made available. If either side faces real consequences for declining or not offering work, the arrangement is not genuinely zero-hours regardless of what the contract calls it.
Do zero-hours workers get a written statement of employment particulars?
Yes. Employment Rights Act 1996 s.1 requires a written statement, generally due from day one, and this applies to zero-hours workers the same as anyone else. It should state plainly that hours are not guaranteed and cover pay and how shifts are offered.
Do zero-hours workers get holiday pay?
Yes. Zero-hours workers are workers and accrue statutory holiday under the Working Time Regulations 1998, currently 5.6 weeks a year, calculated based on hours actually worked rather than a fixed weekly allowance. Check current gov.uk guidance for the specific calculation method for irregular hours.
Can a zero-hours contract require a minimum number of shifts?
No, not while still being genuinely zero-hours. Requiring a minimum number of shifts introduces mutuality of obligation, which changes the legal nature of the arrangement. If guaranteed minimum hours are actually intended, a different contract structure, such as a proper part-time employment agreement, better reflects the reality.
How is holiday calculated for a worker with no fixed hours?
Based on hours actually worked, using a method designed for irregular hours and part-year workers rather than a fixed weekly accrual figure. Check the current gov.uk guidance on calculating holiday entitlement for irregular hours workers before setting the formula in the contract.
Set the zero-hours terms out properly
Set the mutuality position, pay terms and holiday accrual out clearly in a zero-hours contract drafted from vetted England and Wales clauses, then sign it in the same place you drafted it. The free tier gives you three rooms and twenty-five active links, forever, with no card required; the AI drafter and e-signature start on Pro at £19 a month. Start for free and get the arrangement genuinely right before the first shift.
This article is general information, not legal advice. Worker status and holiday calculation for irregular hours are fact-sensitive, and an unusual working pattern deserves a proper check with a qualified adviser.
Sources
- Zero-hours contracts, statutory definition and the exclusivity ban: Employment Rights Act 1996, section 27A, https://www.legislation.gov.uk/ukpga/1996/18/section/27A
- Written statement of employment particulars: Employment Rights Act 1996, section 1, https://www.legislation.gov.uk/ukpga/1996/18/section/1
- Statutory holiday of 5.6 weeks and calculation for irregular hours and part-year workers: Working Time Regulations 1998, https://www.legislation.gov.uk/uksi/1998/1833 ; gov.uk, Calculating holiday entitlement for irregular hours and part-year workers, https://www.gov.uk/government/consultations/calculating-holiday-entitlement-for-part-year-and-irregular-hours-workers/calculating-holiday-entitlement-for-part-year-and-irregular-hours-workers-accessible-html-page
- Zero-hours contracts overview: House of Commons Library, https://commonslibrary.parliament.uk/research-briefings/sn06553/
- Electronic signatures, validity and exceptions: Law Commission, Electronic execution of documents (2019), https://lawcom.gov.uk/project/electronic-execution-of-documents/