Zero Hours Contracts

The General Election  bought the issue of zero hours contracts being used by employers to the political arena. From all this, it has been difficult to separate fact from fiction, so here are the most common questions asked about zero hours contracts:

What are they?

When an employee is engaged on a zero hours basis, the employer does not have to offer any work to the worker and the worker does not have to accept it. For example, Andrea works as a waitress for an events company, when there is work they call her to see if she is available and whether she wants to work at certain events.

Employees with zero hours contracts are still employees and still have rights to annual leave and national minimum wage, protection from discrimination, and as individuals work, they accrue 'continuous service' which counts towards employment rights such as redundancy pay.

Different industries tend to lend themselves to the use of zero hours contracts, for example in hospitality where work is often seasonal with periods of work appearing in peaks and troughs.

What is the issue with zero hours contracts?

The issue with zero hours contracts is that as there is no obligation to offer work, which means that a worker could be working one week and not the next, this creates uncertainty as an employee cannot depend on a regular income. Exclusivity clauses have also been a cause of concern as these limit an employee working for another employer whilst potentially not offering any hours themselves, therefore restricting an individual’s ability to earn a wage. Many individuals enjoy the flexibility these contracts offer, for example students that have differing periods of availability throughout the week.

Are employees aware they are on a zero hours contract?

An employee on a zero hours contract may take regular hours but then complain when an employer does not offer them work when they want it. A clear zero hours contract making clear the nature of the working relationship and obligations for both employer and employee will be very helpful.  A worker can be regarded as an 'employee' if there is a regular pattern of work and the parties come to rely on each other.

Employers should ensure that they provide a clear statement in the employment contract that explains what the zero contract is and the circumstances where an employee may not receive work, as this will clear any issues that may arise from the outset as the employee will be clear about what they are entering into.

Can an employer prevent a worker from working elsewhere?

As part of the Small Business, Enterprise and Employment Act 2015, exclusivity clauses were prohibited from 26^th May 2015 and this measure means that staff who are contracted on a zero hours basis can work for more than one business without being dismissed or disciplined.

This looks to be a fair compromise on the arguments presented as many saw an outright on ban on zero hours contracts as an unfair decision on the many individuals that enjoy the flexibility these contracts offer. 

Conclusion

Zero hours contracts have their place and provide flexibility to both the employer and worker. However, in the spirit of trying to reduce disputes, having clear documentation and communication with employees on zero hours contracts is essential.   

If you would like to know more about zero hours contracts, please don’t hesitate to contact one of the team here at Tamar HR.