Zero Hour Contracts

The Department for Business, Innovation and Skills has produced a guide for employers on zero hour contracts. It explains the difference between appropriate and inappropriate use of such contracts, how they work and best practice on implementing zero hour contracts as well as alternatives to zero hour contracts. The Guide highlights the following:

• The National Minimum Wage applies to all workers and employees
• A zero hours contract may be used appropriately in a new business, for example where work is seasonal, in cases of unexpected sickness, for special events or where a new service is being tested.
• Such contracts can allow flexibility, however they should not be used as an alternative to a permanent arrangement
• Such contracts may not be appropriate where an individual will work regular hours over a continuous period of time. The Guide states that in such situations, a part time or fixed term contract may be more appropriate.
• Employers should consider alternatives to zero hours contracts, such as offering permanent staff overtime, recruiting part time staff or fixed term staff etc.

Comment

Zero hours contracts offer commercial flexibility for employers and may suit some staff, such as students or those with child care responsibilities. The term “zero hours contract” is not a legal one and covers a range of casual working arrangements. The individual may be classed as a ‘Worker’ or ‘Employee’. The employment status of the individual may change. If an employee commences on a zero hours contract but then progresses over a period of time to undertaking regular work with regular hours a Tribunal may, depending on other factors, consider that the individual was in fact an ’employee’. Therefore it is important to consider an individual’s employment status when any decisions are taken for example disciplinary, dismissal or redundancy.

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The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.