Zero Hours Contract Rules UK 2026: What Changed and What Is Coming Next
Exclusivity clauses on zero hours arrangements have been unlawful since January 2026. Further changes are anticipated in 2027. If you have not reviewed your contracts since 2024, you may already be using unlawful terms.
Leon Mclean
Co-founder, Birchlow · Last reviewed June 2026
Zero hours contracts did not become illegal in 2026
The most common misreading of the 2026 changes is that zero hours contracts themselves are now banned. They are not. What changed in January 2026 was that exclusivity clauses on any zero hours arrangement became unlawful. If your contract contains a clause that prevents your worker from taking shifts elsewhere, that clause is now unenforceable and the Fair Work Agency can take enforcement action. The contract itself can stay. The clause must go.
Zero hours contracts remain a practical tool for managing genuine variation in demand. The law has never banned them. What the law has progressively tightened is the ability to use them in a way that traps workers in arrangements that suit the employer but not the worker. Two changes have made that tightening more significant: the January 2026 exclusivity clause ban and the anticipated 2027 guaranteed hours obligation. Employers who have not reviewed their zero hours arrangements since before 2026 are likely using at least one unlawful term right now.
What changed in January 2026
The Employment Rights Act 2025 extended the ban on exclusivity clauses from January 2026. An exclusivity clause is any term that prevents a zero hours worker from working for another employer, or that requires the worker to seek your permission before doing so.
The ban on exclusivity clauses in zero hours contracts specifically has existed since 2015. The January 2026 change made two things different.
First, the ban now applies to all arrangements where no minimum hours are guaranteed, not just contracts formally labelled as zero hours contracts. A casual arrangement documented by a series of emails, or no document at all, falls within the extended ban.
Second, the Fair Work Agency, which launched in April 2026, has powers to enforce the ban directly. Workers can complain to the Agency, and the Agency can require employers to remove unlawful clauses and take further enforcement action where necessary.
If your contracts contain any clause restricting a zero hours worker from working elsewhere, remove it. Do not wait to see whether the worker notices or complains.
What the Fair Work Agency means for you
The Fair Work Agency launched in April 2026 as an enforcement body with powers across several areas of employment law, including zero hours arrangements, national minimum wage and holiday pay. It can investigate complaints, require employers to take corrective action and, in some cases, impose financial penalties.
The Agency operates a complaints process that is free to workers and relatively straightforward to use. Employers who are found to be using unlawful exclusivity clauses can expect to be required to correct their contracts and may face further consequences depending on the circumstances.
What is coming in 2027: guaranteed hours
The Employment Rights Act 2025 gives qualifying zero hours workers the right to request a guaranteed hours contract. The precise details of how this works, including the length of the qualifying reference period and the grounds on which employers can refuse, are to be set out in secondary legislation that had not been published at the time of writing.
What is known is the direction of the right. A worker who has established a regular and recurring pattern of hours over the qualifying period can request that the employer put those hours into a contract. The employer must consider the request genuinely. The employer can refuse on specific grounds, for example genuine variation in demand that makes guaranteed hours unworkable, but must give reasons.
The implication for employers who currently use zero hours arrangements for workers who are, in practice, doing the same shifts every week is significant. Those workers are likely to be the first to qualify. Employers who have not identified those workers and considered their position before the right comes into force are likely to find themselves reacting to requests without a clear plan.
How to track hours now
One practical consequence of the anticipated guaranteed hours right is that employers need to be tracking hours worked for each zero hours worker. Without records, an employer cannot assess which workers have established a regular pattern, cannot verify the hours that form the basis of a request, and cannot defend a claim that a worker was denied guaranteed hours they were entitled to.
Keep records of every shift worked by every zero hours worker: the date, start time, end time and hours worked. These records also protect you if a worker brings a claim for underpaid holiday pay or minimum wage.
What to do with your contracts now
Remove any exclusivity clause. This is the most urgent action. Any clause that restricts a zero hours worker from working for another employer or requires them to seek your permission before doing so is unlawful from January 2026.
Identify workers with regular patterns. Review your rotas and time records. If you have zero hours workers who have worked predictable hours week after week for an extended period, make a note of them. These are the workers most likely to request guaranteed hours once the right is in force.
Check written statements have been issued. Every worker is entitled to a written statement of their terms from day one. Casual workers on zero hours arrangements are included. If you have workers who started without receiving written terms, issue them now.
Review your holiday pay calculation. Zero hours workers accrue holiday at 12.07% of hours worked in each pay period. Verify your payroll is applying this correctly and that tips or tronc payments that form part of normal pay are included where applicable.
Do not use zero hours as a substitute for employment status review. A zero hours contract does not determine someone's employment status. A worker who in practice works exclusively for you, cannot send a substitute and has no genuine ability to decline shifts may be found to be an employee with full employment rights, regardless of what their contract says.
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