Zero hours contracts

There are a number of employee/employer relationships which are now different from the traditional 9-5 job. A person's employment status will determine their rights and their employer's responsibilities.

A zero hours contract is generally understood to be a contract between an employer and a worker where:

On 26 May 2015, new regulations about zero hours contracts were brought in. The law prevents employers from enforcing 'exclusivity clauses' in a zero hours contract.  An exclusivity clause would be where an employer restricts workers from working for other employers.

The Exclusivity Terms in Zero Hours Regulations 2015 state:

There is no qualifying period to bring an unfair dismissal claim for this reason, and any claim made to an employment tribunal will depend on the tribunal finding an exclusivity clause in the employment contract.

Key points:

When are zero hours contracts used?

Zero hours contracts can be used to provide a flexible workforce to meet a temporary or changeable need for staff. Examples may include a need for workers to cover:

It is important for employers to actively monitor their need for zero hours contracts. In many cases, it may be more effective or appropriate to make use of agency workers, or recruit staff on fixed-term contracts - or it may turn out that the need is permanent and therefore a permanent member of staff can be recruited.

Considerations for the employer

Considerations for the worker

  • Easily accessed pool of staff to assist when demand arises
  • No ongoing requirement to provide guaranteed levels of work for staff
  • Can be cheaper alternative to agency fees
  • Provides flexible employment on same basic terms as most workers
  • No on-going requirement to accept offers of work and no consequences
  • Gives employment experience and skills

Breaks between employment

Depending on the specific agreements in the contract, a zero hours contract might mean that the contract only exists when the work is provided.

Where a zero hours contract does mean that the contract only exists when the work is provided, a full calendar week without work from Sunday to Saturday is required to bring about a break in employment.

When employment is continuous certain employment rights accumulate over time. For example, after their first year, workers don't need to accrue their annual leave before taking it.

Equally, when employment is broken, an employer has certain responsibilities too. This includes a need to pay the worker for any accrued and untaken holiday pay.

Employment status

In most cases zero hours contracts mean that an employer recruits a 'worker.' However the way the relationship with that worker develops may enhance the employment status to that of an 'employee', who has additional employment rights. For example, employee status provides statutory notice rights. Developments that contribute to such a change could include subjecting the worker to disciplinary procedures or punishing them in some way if they don't accept all the hours they are offered.

Zero hours status also has to stand up on paper (in the contract) as well as in practice. Where there is a dispute over this, an employment tribunal may decide for themselves what contractual relationship exists between employer and worker and any associated employment rights, including enhancements such as accruing the right to take maternity leave or pay and the right to ask to request flexible working.

To learn more, see our Zero Hours Myth Busting page.

What part will atypical contracts play in the future of working life?


Acas Head of Information and Guidance, Stewart Gee, discusses atypical hours in the Workplace trends of 2015 report by Acas, the CIPD and HRzone.com.

 


Watch helpline advisers Ruth Chapman and Adrian Bennet discuss zero hours contracts 


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