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The short version
A zero-hour contract means the employer has no obligation to offer you work, and you have no obligation to accept it. They're legal. They're common on construction sites. But they come with real risks -- for both sides. If someone's been turning up five days a week for three months on a "zero-hour" arrangement, they're probably not on a zero-hour contract in any meaningful sense. And the law is about to make that distinction a lot harder to ignore.
Why this matters in construction
Construction runs on flexible labour. Projects ramp up. Projects wind down. Subbies come and go. That's the reality.
But zero-hour contracts have become a convenient label slapped on arrangements that look nothing like genuine casual work. Blokes turning up at 7am every day, same site, same gaffer, same hours -- but technically on "zero hours" so nobody has to deal with holiday pay, notice periods, or sick leave.
That's not flexibility. That's avoidance.
The construction sector is one of the heaviest users of zero-hour arrangements in the UK. And the Employment Rights Act 2025 is specifically designed to shut down the exploitative end of that spectrum.
What a zero-hour contract actually is
| Feature | Zero-hour contract | Standard employment |
|---|---|---|
| Guaranteed minimum hours | None | Yes (contractual) |
| Obligation to offer work | None | Yes |
| Obligation to accept work | None | Yes |
| Holiday pay | Yes (accrued) | Yes |
| National Minimum Wage | Yes | Yes |
| SSP eligibility | If earnings threshold met | Yes |
| Unfair dismissal rights | Depends on status + service | Yes (after qualifying period) |
| Notice period | Depends on status | Statutory minimum |
Key point: being on a zero-hour contract does not strip someone of all rights. If you're classed as a worker (which most zero-hour operatives are), you still get holiday pay, NMW protection, rest breaks, and protection from discrimination.
The problem on construction sites
Here's what actually happens:
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Operative works regular hours, same site, 5 days a week for months. Contract says "zero hours." Reality says employee.
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No written terms provided. The operative has no idea what their status actually is.
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Shifts cancelled at the last minute. Operative has already travelled to site. No compensation.
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Exclusivity clauses. Some contracts say you can't work for anyone else -- but you're not guaranteed any hours either. This has been unlawful since 2015 under the Exclusivity Terms for Zero Hours Workers Regulations.
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Used to avoid CIS obligations. If someone's genuinely on a zero-hour contract as a worker, they shouldn't be going through CIS at all -- they should be on PAYE.
What's changing -- Employment Rights Act 2025
The ERA 2025 received Royal Assent and introduces three major new rights for zero-hour and low-hour workers. The guaranteed hours provisions are expected to commence in 2027.
| New right | What it means |
|---|---|
| Guaranteed hours offer | Employers must offer a contract reflecting hours regularly worked over a reference period (expected 12 weeks). Worker can decline -- but the employer must keep offering at each reference period end. |
| Reasonable notice of shifts | Employers must give advance notice of shift times, dates, and hours. Changes and cancellations require reasonable notice. |
| Compensation for short-notice cancellation | If a shift is cancelled, moved, or curtailed at short notice, the worker is entitled to a compensation payment. |
Construction-specific concern: the "ratchet effect." Hours can only go up, not down. Once you've offered guaranteed hours based on a 12-week reference period, you can't easily scale back. Industry bodies are already warning this will push more firms toward agency labour to maintain flexibility.
Anti-avoidance measure: Putting someone on a contract guaranteeing one or two hours a week won't get around this. The Act extends coverage to "low hours" workers who regularly exceed their minimum -- specifically to prevent that dodge.
Signs a "zero-hour" arrangement isn't what it claims
If any of the following apply, the arrangement may actually be employment -- regardless of what the paperwork says:
- Operative works set hours, same days, every week
- They're told when to arrive and when to leave
- They use the contractor's tools and equipment
- They can't send a substitute
- They've been on the same site for months with no break
- They're managed by a site supervisor or foreman
- They only work for one contractor
- Shifts are "offered" but there's a clear expectation they'll be accepted
A tribunal will look at the reality of the arrangement, not the label on the contract.
What happens if it goes wrong
For the operative:
- No guaranteed income, no ability to plan
- Mortgage and credit applications rejected (lenders want stable income)
- Potential tax issues if they should have been on PAYE but weren't
- Loss of employment rights they were actually entitled to
For the contractor/employer:
- HMRC reclassification -- if the "zero-hour" worker is found to be an employee, you owe backdated PAYE, NICs, holiday pay, pension contributions
- Tribunal claims for holiday pay, notice pay, unfair dismissal (if qualifying service met)
- Under the ERA 2025 -- failure to offer guaranteed hours when required will be a new standalone right, enforceable at tribunal
- Compensation for cancelled shifts -- a new cost that doesn't currently exist
What to do
If you're a contractor using zero-hour arrangements:
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Audit your current arrangements. If someone's been working regular hours for more than 12 weeks, they're not genuinely "zero hours" in practice -- and the ERA 2025 will formalise that.
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Issue written terms. You're legally required to provide a written statement of terms from day one. Not doing this is already a breach.
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Don't use exclusivity clauses. They're unenforceable on zero-hour contracts and have been since 2015.
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Plan for the ERA 2025 changes. The guaranteed hours duty is coming. Start tracking hours now so you're not scrambling when it commences in 2027.
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Get the tax position right. If someone is a worker on a zero-hour contract, they go through PAYE. Not CIS. Not self-employed. PAYE.
If you're a worker on a zero-hour contract:
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Know your rights now. You're entitled to holiday pay, NMW, rest breaks, and protection from discrimination -- today, not just when the new law kicks in.
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Keep records. Hours worked, shifts offered, shifts cancelled. You'll need these if it ever goes to a tribunal -- or when the guaranteed hours regime starts.
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Check your status. If you're working regular hours for one contractor, being told when and where to show up, and using their gear -- you may already be an employee in law, regardless of what your contract says.
What to do next
- Check whether your contract has an exclusivity clause -- if it does and you're on zero hours, it's been unenforceable since 2015.
- Keep a record of every shift worked, every shift offered, and every shift cancelled -- you'll need this if it ever goes to a tribunal or when the guaranteed hours regime starts.
- Check your actual employment status using the tests in guide 3.1 -- if you're working regular hours for one contractor, you may already be an employee in law.
- Make sure you're getting holiday pay, National Minimum Wage, and rest breaks -- these apply to zero-hour workers right now.
Sources
- Employment Rights Act 1996, s.27A (zero-hours contracts provisions)
- Employment Rights Act 2025 -- guaranteed hours, shift notice, and cancellation compensation provisions
- ACAS -- Zero-hours contracts guidance
- ACAS -- Employment Rights Act 2025 overview (2027 commencement for guaranteed hours)
- GOV.UK -- Factsheet: Zero hours contracts
- Pinsent Masons -- "Zero hours changes 'a big issue' for UK's construction sector"
- Burges Salmon -- ERA reforms in depth: Zero/low hours and shift workers
- Trowers & Hamlins -- Zero hours: ending one-sided flexibility
- Howard Kennedy -- The Employment Rights Act 2025 and zero hours workers
- SHMA Law -- What the Employment Rights Act 2025 changes
- Doyle Clayton -- Employment Law Guide 2026: Zero hours and low hours workers
- TUC -- Zero-Hours Contract Crisis report, 2025
- Property Wire -- Construction industry braced for zero hour contracts reform
- Exclusivity Terms for Zero Hours Workers (Redress) Regulations 2015
This guide is for information only. It is not legal, tax, or financial advice. Legislation, case law, and HMRC guidance change frequently. The Employment Rights Act 2025 provisions on zero-hour contracts require secondary regulations (expected 2027) -- final details on reference periods, compensation rates, and notice requirements are not yet confirmed. Always take professional advice specific to your circumstances before acting on anything in this guide. SiteKiln is not a law firm and accepts no liability for actions taken based on this content.
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