Though often the subject of negative headlines, zero hours contracts, when used correctly, can be highly beneficial for both employer and employee. The expert employment law team at Bray & Bray highlights their pros and cons, and explains what employers can do to get them right.
A ‘zero hours contract’ is a non-legal term that describes a casual agreement between an employer and their employees. In most cases, the employer is not obliged to provide any minimum working hours and the worker is not obliged to accept any work offered. No matter how many hours are offered, employers are still required to pay the National Minimum Wage.
Zero hours contracts can be very cost effective. Employees are paid for the exact number of hours they are needed. This makes zero hours contracts a useful tool for employers just starting out on a new business venture, who initially may not be able to afford to take someone on permanently.
They are also extremely flexible. Businesses often fluctuate, and in busy times, like over the Christmas period, having a number of employees who can work as and when they are needed can be an invaluable asset for employers. The flexibility of zero hours contracts is beneficial for employees too. It allows them to work without having to give up other commitments.
As hours fluctuate, it can be difficult for the employer to calculate holiday pay. Getting this wrong could lead to a claim being taken out against the employer and brought to the employment tribunal.
The flexibility of zero hours contracts can also come at a price. In the majority of cases, employees are under no obligation to accept work, particularly if it comes at short notice. This can result in staff shortages during unexpectedly busy periods. The amount of flexibility also means it can be hard to secure staff on a long-term basis. A zero hours contract cannot prevent employees from looking for, or accepting, work from another employer.
How can employers get zero hours contracts right?
- Use them appropriately
There are many appropriate uses for a zero hours contract. For new businesses, seasonal work, special events and covering unexpected staff sickness are all justifiable uses. However, if an individual is being asked to work for a set number of regular hours over an extended period of time, a part time contract or fixed term contract is probably more suitable.
- Brush up on employment rights
Anyone engaged on a zero hours contract will have either ‘worker’ or more likely ‘employee’ employment status. As a result, they are entitled to statutory employment rights. This includes being given the National Minimum Wage, paid annual leave, rest breaks and protection from discrimination.
- Be clear and provide notice
Employers should also clearly advertise a role as being zero-hours. Contracts should explain how work will be offered and that employees are under no obligation to accept it. They should also describe the termination process.
Where possible, employers should try and give as much notice as they can of work that becomes available. This is beneficial for both parties; it gives the employee more time to arrange their schedule and so they are more likely to accept the work, which in turn makes it more likely that the employer will secure the cover they need.
Speak to our team
If you’re unsure about any aspect of the law relating to zero hours contracts or employer rights, we will be happy to provide legal advice. Contact us today and our team of specialist employment law solicitors will be happy to help.
Our employment lawyers are based at each of our four offices in Leicestershire. Contact us by calling or clicking on the link below, or pop into one of our offices.
Leicester: call us on 0116 254 8871.
Hinckley: call us on 01455 639 900.
Market Harborough: call us on 01858 467 181.
Corby: call us on 01536 851050.