Written by: Cally Worden
Zero hours contracts are work agreements between an employer and employee, where no minimum level of working hours is guaranteed and the worker does not have to accept any work that is offered to them. The majority of zero hours contracts offer staff ‘worker’ status. This means that they enjoy the same basic employment rights as those on standard contract types, they are entitled to receive the National Minimum Wage, accrue annual leave and get paid for any travel undertaken as a part of their employment.
As of 26th May 2015, employers are no longer able to enforce exclusivity clauses in zero hour‚Äôs contracts. In the past, such clauses have prevented workers from seeking employment elsewhere. This was deemed unfair and unreasonable, as the zero hours employer is not obliged to offer their employees any work at all. The new regulations offer better protection and increased flexibility to workers.
Types of Work
Zero hours contracts are very popular in industries that require a flexible workforce. Additional workers may be required at short notice in many businesses, but it is particularly in relation to:
- Unexpected or short-notice events – such as catering staff required to serve in a restaurant that has received a rush of bookings, or at a function where the venue has been altered at the last minute
- Staff shortages – illness, bereavement, or the untimely departure of an employee can leave a business struggling until the role has been permanently filled again. Zero hours staff can fill these gaps in resource, without placing a heavy recruitment and severance burden on businesses
- Bank work or On-call services – nursing and care workers are often signed up for this type of zero hours contract. They are frequently required to cater for varying and unpredictable levels of demand
What Employers Need to Consider
At face value, zero hours contracts offer employers the ultimate flexibility without the burden of commitment. They don’t have to offer work and can effectively keep a bank of staff on call. It can also work out much cheaper than using agency staff, where fees will apply. However, the transient nature of zero hours workers means that employers fail to receive the loyalty, experience and specific business knowledge that permanent workers bring. And employee rights can accrue over time that may make it more cost effective to use agency workers, or employ part- or full-time staff instead.
What Employee’s Need To Consider
If flexibility is your primary employment requirement then zero hours contracts are ideal. There is no pressure to accept work that is offered, you benefit from the basic rights and terms of work that standard workers receive. It is also an effective way to gain experience and skills. However, the wages are generally very low, anyone who has regular financial commitments and the uncertainty of how much you will earn in a given period is unacceptable.
Employment Status and Breaks
As your relationship with any single employer develops, it is possible for your employment status to shift from that of ‘worker’, to that of ’employee’. This change automatically accords you statutory rights, such as maternity leave. But it also brings in additional obligations in respect of preparedness to work, with the introduction of disciplinary proceedings if workers do not agree to work as often as the employer would like.
It should also be noted that in many zero hours contracts the ‘worker’ status only exists when work is provided. So any benefits accrued, such as holiday days will be pro-rated accordingly. A break in employment is generally considered to be a period of a single week without work (usually Sunday to Saturday). If work is provided continuously, certain rights build up, such as being able to take holiday days before they have accrued when you have been working for a period of 12 months or more. Similarly, if continuous employment rights have accrued, employers are obliged to pay workers for any accrued holiday days if the contract is broken.
If you are unsure of your rights under a zero hours contract then the organisation ACAS can assist you by providing free and impartial advice.