Written by: Cally Worden
A zero hours employment contract generally offers workers employment status, but with no fixed hours – the employer is not obliged to offer work, and the employee is not obliged to accept any work offered. So what’s the point?
Flexibility is the main point, for both workers and employees. These types of contract are most commonly used in industries where staff requirements fluctuate wildly, and are favoured by workers who can find it difficult to commit to fixed hours, such as students and some parents with young children. They are also sought by workers who are in the process of seeking a fixed hours contract and wish to make themselves available for work in the meantime.
Why Employees Like Them
Employees like zero hours contracts because they means they only have to pay for labour when it is required, for example to cover unexpected and temporary staff shortages. It also provides them with a cheaper alternative to sourcing staff via an employment agency, which has been the traditional source of temporary staff for many businesses.
Why They are Good for Employees
For employees, zero hours contracts are attractive because they are flexible yet also, in most cases, offer certain standard employment rights, such as annual leave, and a pay rate that is at least equal to the National Minimum Wage. They also represent ’employment status’, which can be valuable for a worker in other areas of life, such as when seeking credit.
The Issue of Breaks
The nature of zero hours contracts means that several weeks may pass between periods of work done by an employee. Some zero hours contracts are worded to mean that the contract only exists and applies when work an employee is actively engaged in work. In this instance, it is generally accepted that a break of one working week or more between activities constitutes a formal break in the contract. This has implications for the accrual of annual leave and holiday pay.
When employment is provided and work is done over a continuous period of time under a zero hours contract certain employment rights build up. Each contract varies, but workers will generally accrue rights to holiday days, which the employer must honour and pay for.
The line between the classification of ‘worker’ and ’employee’ is a little blurred, but it is an important distinction because the status of ‘Employee’ brings additional rights, such as the statutory notice rights (workers cannot be laid off without warning). Anyone signing-up to a zero hours contract should read their contract carefully and be clear on exactly what rights, and obligations, the arrangement offers.
Many jobs demand that employees travel as a part of their work. A care-in-the-community worker, for example, will travel between clients in the course of their working day. Under zero hours contracts employers are obliged to pay at least the minimum wage to workers for time spent on the road. This same right to minimum pay applies to workers who have to be on-call on an employer’s premises.