Zero hours contracts have been hitting the headlines over recent months. A government consultation on the issue that closed in March attracted more than 30,000 responses while Labour leader Ed Miliband pledged in April to introduce a package of zero hour contracts reforms if Labour won the 2015 general election.
With this in mind, here is a quick guide to some key points relating to the current state of play regarding zero hours contracts:
What is a zero hour contract?
There is no legal definition but a zero hour contract is generally thought to be a contract between an employer and a worker under which the employer does not have to provide any minimum working hours and the worker does not have to accept any of the hours that are offered.
Both sides should be aware that this makes their working relationship different than those governed by other most employment contracts.
Most zero hour contracts will give staff the legal employment status of worker – rather than employee – and workers on zero hour contracts have the some but not all of the same employment rights as regular employees
Why are zero hours contracts used?
They can be useful when employers need a flexible workforce to meet temporary or fluctuating staff needs, for example:
- a hotel might need extra staff if it accepts a booking for a wedding reception or other function at very short notice
- a company providing care in clients’ homes might use zero hour contracts for bank staff, who could be called in to cover when a regular member of staff goes on sick leave.
While zero hours contracts can bring benefits to both employees and staff, employers may want to explore other options that could provide them with the flexibility they are looking for, such as employing agency staff or staff or using fixed-term contracts.
By monitoring their use of zero hour contracts, they may even find that it would be more cost-efficient to take on a permanent employee.
The Palmers’ Employment Law team can provide expert advice on all employment contract issues, including drafting bespoke contracts or providing template documents as part of our HR Package. For more information, please visit our website or contact Lara Murray.