A zero-hour contract is an employment agreement between an employer and an individual. The term ‘zero-hour contract’ is a non-legal term.
Generally speaking, a zero-hour contract suggests that an employer does not guarantee the person (employee) any hours of work. The hours are offered when work is available, meaning that the ‘employee’ is never guaranteed work and, therefore, money.
The individual in question can choose to work the hours offered. However, for any hours that are worked, the employer is required by law to pay at least the minimum wage.
What are my rights with a zero-hour contract?
No matter the hours worked, location or employer, everyone employed on a zero-hours contract is entitled to statutory employment rights.
- These include:
- Statutory annual leave
- National minimum wage
- Rest breaks at work
- Rest between working days or shifts
- Weekly rest periods
Contrary to popular belief, an employer must allow a person to take work elsewhere if appropriate. This could be because the worker feels that they are not receiving enough hours of work (and therefore pay) under their zero-hour contract.
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When should I use zero-hour contracts?
As an employer, it might not be suitable to use zero-hour contracts to run your entire business. Depending on the nature of the work, you should consider whether it might be more suited to offer part-time or full-time employment contracts. Not only would this be more reliable, as staff are contracted to the work that you require, but often it increases productivity as the employee feels more part of the company, so is increasingly likely to have loyalty to your business.
However, sometimes, zero-hour contracts may be the best option for your firm. During busy periods, such as December in the run-up to Christmas in retail stores, you may consider hiring some people using zero-hour contracts due to the short-term increase in workload. Similarly, if you are working towards opening your company, there may be significant amounts of administrative or laborious tasks that you may want to hire some people on zero-hour contracts until the business opens or until the work dies down. This could be an excellent opportunity for hiring people with more permanent contracts and roles.
What should be stated in a zero-hour contract?
To follow best practices, employers should ensure that they include the following in the contract:
- Employment rights the worker is entitled to
- Which statutory employment entitlements will be accrued in the necessary cases
- How the contract might be brought to an end
Often, those on zero-hours are students or those with caring responsibilities (e.g., parents with young children); therefore, an employer should always aim to give as much notice before a shift as possible to give the worker the best chance of being able to attend.
On the other hand, with any business, it is unacceptable for workers to cancel their shift at late notice, so the employer might want to consider creating a policy explaining circumstances under which when and how work could be cancelled.
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This blog was prepared on 9 September 2022. It is not intended to be advice and should not be relied upon as such.