Zero-hours workers holiday and sick pay entitlements

This is a really common question, and the short answer is that zero-hours workers do have more rights than many people realise.

Holiday pay:

Zero-hours workers are entitled to paid annual leave. Under the Working Time Regulations 1998, all workers, not just employees, are entitled to 5.6 weeks of paid annual leave per year. This applies to zero-hours workers in the same way as anyone else. The amount of holiday pay they receive is calculated based on the hours they have actually worked. In practice, many zero-hours workers accrue holiday entitlement in proportion to the hours they work. Some employers calculate this using the 12.07 per cent method, where 12.07 per cent of hours worked is treated as accrued holiday. Following the Supreme Court decision in Harpur Trust v Brazel (2022), the correct method for calculating holiday pay for part-year and irregular-hours workers was clarified, and this caused some complexity. However, the government subsequently introduced amendments through the Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023, which came into force on 1 January 2024, allowing a rolled-up holiday pay method and an accrual method specifically for irregular-hours and part-year workers. This means employers can now lawfully include an uplift for holiday pay in each payslip for these workers, calculated at 12.07 per cent of pay in the relevant pay period.

The key point is that a zero-hours worker should be receiving holiday pay one way or another. If they are not, this is unlawful and they can bring a claim to an employment tribunal.

Statutory sick pay:

The position on sick pay is more restrictive. To qualify for statutory sick pay, a person must be an employee or worker and must earn at least the lower earnings limit, which is currently £123 per week on average. Many zero-hours workers will not meet this threshold, particularly if their hours are very low or irregular, and so they may not qualify for statutory sick pay. There is no entitlement to contractual sick pay unless the contract provides for it, which is rare on a zero-hours arrangement.

This has been widely criticised as a gap in protection. The government has signalled its intention to reform statutory sick pay through the Employment Rights Bill currently going through Parliament. The proposed changes include removing the lower earnings limit and removing the current three waiting days before statutory sick pay kicks in. If enacted, these reforms would significantly improve the position for zero-hours workers. However, at the time of writing, the Bill has not yet received Royal Assent.

Other points worth noting:

Zero-hours workers also have the right not to suffer a detriment for refusing to work a particular shift, the right to the national minimum wage for all hours worked, protection from unlawful discrimination, and auto-enrolment into a workplace pension if they meet the earnings trigger.

Under the Employment Rights Bill, if passed, zero-hours workers may also gain rights to guaranteed hours based on the hours they regularly work, and rights to reasonable notice of shifts and compensation for cancelled shifts.

Practical steps if rights are not being respected:

1. Check payslips carefully to see whether holiday pay is being included.
2. If holiday pay is missing, raise it in writing with the employer first.
3. If that does not resolve it, a claim can be brought to an employment tribunal, but the worker must go through ACAS early conciliation first.
4. Keep records of all hours worked, shifts offered and declined, and any communications with the employer, as these will be important evidence.

The time limit for bringing a tribunal claim for unlawful deduction from wages, which is the usual route for unpaid holiday pay, is three months less one day from the date of the last deduction or the last in a series of deductions.