Zero Hours Contracts
What are zero hours contracts?
There is no legal definition of a zero-hours contract. However, it is generally accepted that a zero-hours contract is a casual worker contract where there will be no guarantee that the employer will offer any work, though the worker is expected to accept any work offered. The worker will only be paid for hours actually worked.
A zero-hours worker can be either an employee or a worker, depending on the individual circumstances.
Can our employment solicitors help?
If you need a zero hours contract drafting, or need a review of an existing contract, take a look at our employment contracts page and give us a call on 0845 225 2635
Why use a zero hours contract?
Zero-hours contracts are currently subject to much political debate. There is no regulation of zero-hours contracts, unlike in some other EU countries where there are restrictions on employers and workers entering into this type of arrangement. One view is that employers are able to take advantage of staff and avoid some employment law obligations by using zero-hours contracts. On the other hand, the ability to use this type of arrangement gives employers flexibility, which is key in many industries, for example retail and hospitality, where it may not be possible to predict business and staffing needs throughout the year.
Zero-hours contracts and employment rights – a tricky area
Both the legal and practical issues surrounding the use of zero-hours contracts are difficult for employers. Firstly, there is the question of whether an individual is a worker or an employee for employment status purposes. This is important and will determine what legal rights are afforded to that individual, and each contract will need to be considered in isolation.
Whether an individual is a worker or an employee, they will be entitled to paid holiday under the Working Time Regulations 1998. Current entitlement is to 5.6 weeks’ paid leave per year (inclusive of public holidays). However, from an administrative point of view, there are difficulties in calculating entitlement (both in accrual and pay terms) due to the irregular hours’ worked, and in ensuring time off from work is actually taken.
Employers may also experience difficulties when addressing their obligations in relation to pensions and auto-enrolment.