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What You Need to Know About Zero Hours Contracts

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Zero hours contracts can provide your business with easy access to a pool of staff when the demand occurs at a cheaper cost than agency workers. These benefits and the lack of commitment to provide a guaranteed level of work for staff may seem like an attractive option, but are zero hours contracts a good fit for your business?

What is a zero hours contract?

A zero hours contract, although not defined by legislation is widely considered to be a contract of employment between an employer and worker. One important difference between a zero hours contract and a typical employment contract is that the member of staff is considered to be a worker and not an employee.

Unlike an employee, a worker will not have minimum working hours and they are not obliged to accept hours of work which are offered. Workers will also not be entitled to a number of benefits which employees enjoy.

The difference between employees and workers

Both employer and worker need to be aware that a worker on a zero hours contract will have different rights than an employee under a standard employment contract.

Most workers are entitled to the following:

  • National Minimum wage
  • Statutory Sick pay
  • Working Time Regulations (including rest breaks, paid holiday and night work limits)
  • Maternity, paternity or adoption leave but not pay
  • Protection from deductions in pay

Employees are entitled to minimum statutory employment rights, in addition to all of the rights which workers are entitled to:

  • Maternity (including paternity and adoption) leave and pay
  • Statutory redundancy pay

Should your business use zero hours contracts?

The most common reason for implementing zero hours contracts is to introduce increased flexibility into the workforce to meet a temporary or changeable need for staff.

Other reasons to use zero hours contracts include:

  • Your business is particularly seasonal with a greater demand for staff at one time of the year
  • Your business has un-expected or short notice events that require additional staff
  • Your business carries out on-call or bank work where you might need an extra employee for a short period of time
  • To help your business through times of temporary staff shortages during long-term illness or maternity leave

Alternatives to zero hours contracts

The use of zero hours contracts should be continuously monitored by the employer to ensure that there is a continuous need to keep zero hours contracts in place.

Sometimes hiring agency workers can be an alternative to zero hours contracts, or you may find through monitoring the use of zero hours contracts that you have the need for a permanent employee.

Considerations for zero hours contracts

A zero hours contract is not a one size fits all contract and can contain specific agreements which mean that the contract is active only during the times when work is offered.

In the case where a zero hours contract is only active during the time period when work is provided, a full calendar week without work will usually initiate a break in employment. A break in employment may result in the employer paying the worker holiday pay.

Conversely a continuous period of employment under a zero hours contract may trigger particular employment rights.

For this reason it is important to carefully construct a zero hours contract if you believe this is the best option for your business.

Get a legal opinion on a zero hours contract

It is always wise to consult a legal professional when contracts are involved, especially one as flexible and intricate as a zero hours contract. For free and impartial legal advice on employment contracts, contact Employer Advice today on 0161 115 6164.

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