Celebrations are planned this evening after McDonald's and Unite Union reached an agreement to end "zero hour" contracts.

The deal meant planned strikes at the fast food company today were called off.

Unite said the agreement meant more companies would abolish the controversial contracts.

The union planned celebrations tonight, with the zero hours deal coinciding with May Day.

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Unite organiser Joe Carolan said the union had campaigned on the issue for 10 years. He said they had received wide support, including from the political right.

"We talked about secure hours. We talked about under-employment. We talked about a lot of things."

But Mr Carolan said these terms didn't crystallise the issue as "zero hours" did.

"It wasn't so much that people worked zero hours per week ... it's that people had zero hours guaranteed," he said.

"The support in this campaign just didn't come from the traditional left and other unions. It came from the right. It came from Middle New Zealand. It came from a lot of employers as well who were in contact with us, saying: 'Look, I don't normally agree with unions but you're dead right. There's a reciprocal responsibility on employers to provide enough hours for a worker to be able to pay the rent and live.' That's what we're talking about," he said.

"We're not looking for the whole bakery. But we are looking for several loaves of bread."

Workers at McDonald's would now be guaranteed 80 per cent of the average hours worked over a three-month period.

Mr Carolan said in other Western countries, more employers were pushing for zero hours contracts, so the victory here was not typical of global trends.

He said McDonald's was usually the most "ideological" firm the union dealt with, which made the deal even more groundbreaking.

Mr Carolan said other companies would take their cue from the fast food giant.

Unite said it would now ask Sky City, security companies, and other fast food chains to do away with zero hours contracts.

"Wendy's, we are now coming for you," Mr Carolan said.

He said the Government was now obliged to change the law and outlaw zero hours contracts.

He believed the vast majority of New Zealanders would support the abolition of such contracts.

Labour Party MP Iain Lees-Galloway said Unite and McDonald's were to be applauded for the deal.

"Earlier this week it looked like Unite and McDonald's had reached an impasse in negotiations. But rather than walking away, both parties remained in talks and worked together to reach a solution.

"That's the exact opposite of what the Government has allowed to happen by removing the duty to conclude collective bargaining from New Zealand's employment law," Mr Lees-Galloway said in a statement.

"Good employers will always stay at the table until agreement is reached. But there is a real danger that some employers, especially those that aren't in the spotlight like McDonald's, will simply walk away when the going gets tough."

Unite was rallying at 5pm in Queen Elizabeth II Square, beside Britomart railway station.

It also planned a party at its Morningside headquarters in Western Springs Rd later.