What exactly is a Zero Hours Contract?

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With the rise of the “gig” economy, many peoples’ working circumstances considerable strays from the traditional 9-5 job thinking. In March 2017 research recorded that there are nearly 1 million UK workers on zero hour contracts. This is a four fold increase in this type of contract from 2000 and there is still much controversy around it with the Sports Direct and Uber cases and also the Labour party wanting to make the contract illegal in their 2017 manifesto.

So what is a zero hours contract?

A zero hours contract is an employment contract between employer and worker. It effectively means that as an employer, you are not obliged to guarantee any working hours to an individual. Equally, your worker is not obliged to accept any work you offer them and they are free to work for other employers.

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Zero hours contract – when would you use it?

You may engage workers on a zero hours contract basis if you want a flexible workforce that can temporarily cover any shortfalls in staffing that you have. Examples can include:

  • Unexpected or last minute events (e.g a restaurant needing extra staff to cater for wedding party that had their original venue cancel a the last minute).
  • Temporary staff cover (e.g an office loses an essential specialist work for a few weeks due to a bereavement).
  • On-call/bank workers (e.g. a client of a care-worker company requires extra care staff for a short period of time).

Zero hours contract 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.

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Breaks between employment

Depending on what agreements are outlined, a zero hours contract might mean that the contract only exists when work is provided to the employee. If this is the case a break in employment is considered as when no work is provided for a full calendar week (from Sunday to Saturday).

If employment is continuous then the worker has rights that accumulate over time. Equally, workers are also entitled to the minimum living wage, paid holiday, rest breaks and protection against discrimination, overwork and unlawful wage deductions.

When an employment is broken, the employer has responsibilities too, including the need to pay the worker for any accrued and untaken holiday pay. In event of the employment being broken, the worker is not required to notify the employer or provide a period of notice.

If you need any further help or clarification on the above, get in touch with HR Revolution +44 203 538 5311 or email: info@hrrevolution.co.uk, we look forward to hearing from you.

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