Zero-hours contracts have become increasingly popular in recent years, particularly in sectors such as hospitality, retail, care and delivery services. They can provide businesses with flexibility when staffing needs fluctuate, while allowing individuals to work around other commitments. However, the lack of guaranteed working hours does not mean that employers can end the arrangement without considering the individual’s legal rights.

When an employer wants to end a zero-hours arrangement, it is important to distinguish between formally terminating a zero-hours contract and simply stopping or reducing the shifts offered. The legal position depends on the contract terms and whether the individual is legally an employee or a worker. Employers must also ensure that they do not penalise individuals for exercising statutory rights or end the arrangement for an unlawful reason.

This guide explains what employers should consider when ending a zero-hours contract, including employment status, statutory protections, notice, continuous employment and redundancy.

Can an Employer Terminate a Zero-Hours Contract?

Terminating a zero-hours contract ends the contractual relationship between the employer and the individual. This is distinct from simply not offering shifts, as a zero-hours contract can remain in place even when no work is available.

Before terminating a zero-hours contract, employers should carefully consider the agreement’s terms and the individual’s employment status. Although zero-hours contracts do not usually guarantee a minimum number of working hours, individuals can still have important legal protections under the Employment Rights Act 1996 and other employment legislation.

Can an Employer Simply Stop Offering Shifts?

A zero-hours contract will generally not require an employer to provide a minimum number of hours. Depending on the terms of the contract, an employer may be able to stop offering shifts without formally terminating the contract. However, stopping shifts is not necessarily the same as ending the employment relationship.

Where the individual is a worker, they generally have no right to be offered a minimum number of hours. An employer may therefore be able to offer no further shifts, depending on the terms of the contract. However, employers should still consider whether withdrawing shifts could breach any statutory protection or contractual obligations.

Where the individual is an employee, the position is different. Simply withdrawing shifts may not necessarily bring the employment relationship to an end and, depending on the circumstances, could raise questions about dismissal or redundancy. Employees also have broader employment protections, including protection from unfair dismissal where the relevant requirements are met.

Employers should therefore consider the individual’s employment status, the terms of the contract and the reason for withdrawing shifts before deciding how to proceed. If the employer intends to end the contractual relationship, it should also check whether any contractual or statutory requirements apply.

Employee or Worker: Why Employment Status Matters

Employers must establish whether the individual is legally an employee or a worker. Both employees and workers can have zero-hours contracts, but the individual’s legal status affects the employment rights they have when the arrangement ends.

An employee works under a contract of employment and generally has a wider range of employment rights. These can include protection from unfair dismissal, statutory notice rights, and, where the relevant conditions are met, statutory redundancy pay. Employees may also be protected against automatically unfair dismissal for certain protected reasons.

A worker has fewer employment rights than an employee but still has several important statutory rights. These include the National Minimum Wage, paid annual leave and rest breaks, and protection against detriment for exercising certain statutory rights. Workers generally do not have the ordinary right to bring an unfair dismissal claim.

Importantly, the label “zero-hours contract” does not determine whether someone is an employee or a worker. Employment status depends on the reality of the relationship, including the terms of the agreement and how the arrangement operates in practice.

Dismissal and Detriment

The legal protections available when a zero-hours arrangement ends depend on whether the individual is an employee or worker:

Dismissal

Employees: An employee may be protected from unfair dismissal under S.94 of the ERA 1996, subject to the applicable qualifying requirements. Dismissal for certain protected reasons can be automatically unfair, meaning the employee does not need the usual qualifying period. From 1 January 2027, the ordinary qualifying period for unfair dismissal will be reduced from two years to six months.

Workers: Workers generally do not have the ordinary right to claim unfair dismissal. However, if an employer ends a worker’s engagement because the worker exercised a protected statutory right, the termination may amount to an unlawful detriment.

Detriment

Detriment broadly means being treated worse or having your situation worsened because you have exercised a protected right. In a zero-hours context, this could include reducing or withdrawing shifts, refusing further work, or treating someone less favourably.

• Working for another employer: A zero-hours worker must also be free to work for another employer. An exclusivity term preventing them from doing so is unenforceable. An employer must not treat the worker unfavourably or dismiss them because they work elsewhere or took a second job.
• Exercising statutory rights: An employer must not subject a worker to detriment, or dismiss an employee, because they have exercised certain statutory rights. For example, raising concerns about National Minimum Wage entitlement or asserting statutory rest-break rights can attract protection.
• Health and safety concerns: An employee or worker may have protection where they raise a health and safety concern. For employees, dismissal for certain protected health and safety activities can amount to automatically unfair dismissal; workers may instead have a detriment claim.

Employers should therefore consider why they are withdrawing shifts or ending the arrangement and ensure the decision is not connected to a protected activity or statutory right.

Zero-Hours Termination Notice Periods

Where applicable, employers should confirm whether the individual is entitled to contractual or statutory notice before ending the arrangement.

The notice requirements depend on whether the individual is an employee or a worker. An employee with at least one month’s service will generally be entitled to the statutory minimum notice period upon termination of employment, unless an exception applies. The statutory minimum ranges from one week to 12 weeks, depending on length of service, although the contract may provide for a longer period.

An employee who has worked continuously for at least one month will generally need to give at least one week’s notice when resigning, unless the contract requires a longer period.

A worker does not generally have a statutory right to notice when their engagement ends. However, if the contract specifies a notice period, the employer should follow the contractual terms. Employers should therefore check the individual’s employment status and contract before ending a zero-hours arrangement.

Continuous Employment

When ending a zero-hours contract, employers should check whether the individual has continuous employment, as this can affect their employment rights. Irregular hours or periods with no shifts offered do not necessarily mean that employment has ended or that continuous service has been broken. Employers should therefore avoid assuming that each period of work under a zero-hours contract is a separate period of employment.

Continuous service can be particularly important for employees when determining eligibility for rights such as ordinary unfair dismissal protection and statutory redundancy pay.

For zero-hours arrangements, continuity of employment can depend on the pattern of work and the circumstances of the relationship. Acas guidance states that where an individual is not provided with work for a full calendar week, from Sunday to Saturday, this will usually break continuity of employment.

However, exceptions include certain periods of sickness or injury, seasonal or academic work that regularly stops temporarily, and agreed career breaks. Employers should therefore consider the specific circumstances before concluding that continuous employment has ended.

Redundancy

Redundancy may arise where an employer’s need for employees to carry out work of a particular kind has genuinely diminished or ceased. However, simply stopping or reducing the number of shifts offered to an individual does not automatically constitute redundancy.

Employers should consider whether a genuine redundancy situation exists and, where appropriate, follow a fair process and consult the employee. Redundancy should not be treated as an automatic consequence of a reduction in shifts.

Where the relevant conditions are met, an employee may be entitled to a statutory redundancy payment under S.135 of the ERA 1996. This generally requires at least two years’ continuous service. Workers who are not employees will generally not be entitled to statutory redundancy pay.

Employers should therefore determine the individual’s employment status and length of continuous service before deciding how to end a zero-hours arrangement. Where redundancy is proposed, seeking appropriate advice and following a fair process can help reduce the risk of disputes or claims.

Where an employee is made redundant, they will normally be entitled to their contractual or statutory notice period, unless the employer makes a payment in lieu of notice (PILON) where this is permitted.

What Needs to Be Done When the Relationship Ends?

When a zero-hours employment relationship ends, employers should ensure they address all outstanding payments and contractual obligations. Depending on the circumstances, this may include:

• Outstanding wages for work already carried out;
• Accrued but untaken holiday pay; and
• Notice pay, where the employee is entitled to notice and does not work it, including PILON where applicable.

Employers should also check whether the employee is entitled to a statutory redundancy payment. This generally requires the individual to have at least two years’ continuous service and to be dismissed for redundancy. Working under a zero-hours contract does not, by itself, prevent the individual from qualifying.

Where redundancy applies, employers should follow the appropriate redundancy process and provide the employee with written details of the redundancy payment and how it has been calculated. Redundancy pay should not be treated as an automatic payment whenever shifts are reduced or stopped; there must be a genuine redundancy situation.

Employers should also provide the employee with their P45 when they leave and ensure that any continuing contractual obligations, such as confidentiality, are observed.

How Can Employers Reduce the Risk of Unfair Dismissal Claims?

If a zero-hours worker is an employee, employers should exercise care when ending the employment relationship. A dismissal will generally need to be based on a potentially fair reason and handled reasonably.

Good practice

Consider the reason for termination

Employers should identify and document the genuine reason for ending the employment. Depending on the circumstances, this could include redundancy, conduct, capability, or another potentially fair reason. Employers should also check that the reason is not connected to the employee exercising a statutory right or to another protected reason.

Check the employee’s status and length of service

The individual’s employment status and continuous service can affect which rights apply. This is particularly important for zero-hours arrangements, where the working pattern may make continuous employment less apparent.

Follow a fair procedure

Even where there is a potentially fair reason, an employer should investigate the circumstances, give the employee an opportunity to respond, and, where appropriate, allow them to appeal. Following the Acas Code of Practice on disciplinary and grievance procedures can help demonstrate that the decision was reached fairly and reasonably.

Check for protected reasons

Employers should consider whether the decision could be linked to pregnancy, family leave, whistleblowing, health and safety concerns, working time rights, or any other reason that could result in automatic unfair dismissal or another claim.

Keep clear records

Employers should retain records of decisions, communications and relevant evidence. This can help demonstrate why the decision was made and how the process was followed.

Apply the same approach consistently

Employers should consider whether they have dealt with comparable situations consistently and avoid treating individuals differently without a legitimate reason.

A consistent, well-documented approach can help employers manage the risks of ending zero-hours arrangements and reduce the likelihood of unnecessary disputes.

Upcoming Changes to Zero-Hours Contracts

The Employment Rights Act 2025 introduces significant changes to zero-hours and similar contracts. The Government has now concluded its consultation on how these reforms will operate in practice, but the new measures are not yet in force. The Government is continuing to develop the final policy and regulations, with implementation expected in 2027.

The reforms will introduce three key protections for eligible workers:

• A right to guaranteed hours, based on the hours regularly worked during a specified reference period;
• A right to reasonable notice of shifts and changes to shifts; and
• A right to payment where shifts are cancelled, moved or curtailed at short notice.

The precise details, including eligibility requirements, reference periods, hours thresholds, and the level of notice and compensation required, will be set out in regulations. Employers should therefore keep the position under review and consider how the changes may affect their use of zero-hours contracts once the new rules take effect.

Getting the Right Support

Zero-hours contracts can offer businesses valuable flexibility, but ending these arrangements requires employers to consider the individual’s employment status, contractual rights and statutory protections. Taking the right steps before withdrawing shifts or terminating a contract can help employers manage risk and avoid unnecessary disputes.

Witan Solicitors’ Employment Law team can advise employers on zero-hours contracts, employment status, disciplinary and dismissal procedures, redundancy, and broader employment issues. If you are considering ending a zero-hours arrangement or would like advice on managing your workforce, contact our Employment team on 0300 303 2071 or by email.

FAQs

Do Zero-Hours Employees Qualify for Redundancy Pay?

Employees on zero-hours contracts may be entitled to statutory redundancy pay if the relevant conditions are met. Working irregular hours or being on a zero-hours contract does not, by itself, prevent an employee from qualifying. Workers who are not employees generally do not have a right to statutory redundancy pay.

What Happens if a Zero-Hours Employee Resigns?

An employee who has worked for at least one month must normally give at least one week’s notice, unless their contract requires a longer period. The contract should therefore be checked.

For a worker, there is generally no statutory minimum notice requirement, although the contract can require notice.

When Might Ending a Zero-Hours Contract Lead to an Unfair Dismissal Claim?

Being on a zero-hours contract does not prevent an employee from bringing an unfair dismissal claim. Currently, an employee generally needs two years’ continuous service unless the dismissal is for an automatically unfair reason. Workers who are not employees generally cannot bring an ordinary unfair dismissal claim, but may have other protections, such as protection from unlawful detriment.

Last Reviewed: Qarrar Somji, October 2026