Casual and seasonal workers – what you need to know

As we head into the Christmas rush, it’s worth taking a moment to understand the rights and rules around seasonal workers. Whether you’re hiring extra hands for the festive period or picking up some extra shifts yourself, there are some important things you need to know about zero-hour contracts, holiday pay, and the
changes heading your way through the Employment Rights Bill.

What is a zero-hour contract?

It’s exactly what it sounds like. The employer doesn’t guarantee any hours, and the employee doesn’t have to accept every shift that’s offered. It’s flexible for both sides.

You’ll find these contracts all over the place in hospitality, retail, healthcare and construction. Around 1 million people in the UK work on zero-hour contracts, many of them students, young workers, or people juggling other commitments.

The rights that still apply to zero-hour contracts

Just because hours aren’t guaranteed doesn’t mean workers lose their basic rights.

Here’s what still applies:

National minimum wage

Every single hour worked must be paid at least the National Minimum Wage for that person’s age. Whether it’s a zero-hours contract or not, this is non-negotiable.

Working for other employers

Employers can’t stop workers from taking other jobs. If an employer tries to put an exclusivity clause in a contract (written or verbal) that prevents someone from working elsewhere, workers can ignore it.

Holiday pay

This is the big one that catches people out. Workers on zero-hour contracts get 5.6 weeks of paid holiday per year, just like everyone else.

Calculating it when hours change every week might seem complicated, but there’s a clear method.

Most employees accrue holiday at 12.07% of the hours they actually work. So if someone works 100 hours in a month, they earn about 12 hours of holiday entitlement.

When they take that holiday, they get paid based on their average earnings over the previous 52 weeks. Here’s how it works:

1. Add up all the hours worked in the last 52 weeks
2. Add up all the money paid for those weeks
3. Divide the total pay by the total hours to get the average hourly rate
4. Pay this average rate for each hour of holiday taken

If there are weeks where no work happened, those zero-pay weeks get ignored. The calculation extends back further until there are 52 weeks during which pay was actually earned. If there aren’t 52 weeks of work yet, use however many weeks there are.

Rolled-up holiday pay

From April 2024, employers can use rolled-up holiday pay for zero-hour workers. This means adding 12.07% extra to normal pay instead of paying when people take holiday. If this happens, it must be clearly shown on the payslip.

What’s changing with the Employment Rights Bill

The government is making some significant changes to protect workers on zero-hour contracts. Most are expected to come into effect in 2026 or 2027.

Right to guaranteed hours

This is the biggest shift. If someone regularly works certain hours over a 12-week period, the employer must offer a contract that guarantees those hours.

Here’s how it will work:

• After 12 weeks of working regular hours, the employer must offer a guaranteed hours contract
• The contract must reflect the average number of hours worked
• The worker doesn’t have to accept if they prefer to stay flexible
• The employer must make the offer again after every 12-week period

So if someone consistently works 20 hours a week for 12 weeks, the employer must offer a contract guaranteeing those 20 hours.

Reasonable notice of shifts

Employers must provide reasonable notice of shifts. The exact amount will be set out in future regulations, but it’s designed to stop last-minute scheduling.

Compensation for cancelled shifts

If an employer cancels a shift at short notice or suddenly moves it, workers will have the right to compensation. This protects people from losing out when plans change at the last minute.

Protection from unfair treatment

Workers will be protected from being dismissed or treated badly if they refuse to work a shift offered with too little notice.

What this means

The Employment Rights Bill is tackling what’s been called “one-sided flexibility” where only employers benefit from flexible arrangements. The changes aim to give workers more security while keeping flexibility for those who want it.

The House of Lords has recently returned the Bill to the House of Commons for further review and amendment. At this stage, it looks like the Bill will go through, but with amendments. What those amendments are, we don’t know yet. The Employment Rights Bill will no doubt get Parliamentary approval. We’re just
waiting to see in what form.

Need help managing payroll for seasonal workers? The team at Ascend handles complex payrolls every day, including zero-hour contracts, rolled-up holiday pay and all the rest. Get in touch to see how we can take the hassle out of your payroll.