What is a Zero-hour contract?
Zero-hour contracts are the in-between status of employment and self-employment.
Giving workers the freedom to pick and choose their working hours, which is great for those with other responsibilities such as caring for a child or a loved one and those looking to take home some extra cash without the commitment.
Although zero-hour contracts are often portrayed as a cruel, heartless way of hiring staff they can be beneficial to both employer and employee.
The employer doesn’t have to provide any minimum number of working hours and the worker doesn’t have to work a minimum number of hours. Sounds simple enough right? Not quite.
It’s important to get things right to avoid pitfalls Employment Law.
There are various terms for zero hour contract workers including casual worker and although strictly speaking there is nothing wrong with the term causal worker it is not recognised in Law.
Employers should also be aware that zero hour workers are still entitled to basic employment rights such as.
- Written terms
- Paid holidays
- Protection from whistleblowing
- Protection from unlawful discrimination
- National minimum wage
- Payslips
Like most things, Zero-hour contracts come with both pros and cons for both parties.
Pros
The benefits for employers are…
- Reduces cash flow worries.
- Great alternative to employment in seasonal industries such as hospitality and entertainment which sees a reduction in income certain parts of the year.
- Employers can get the opportunity to hire staff on an ad hoc basis before making the decision to have the commitment of an employee.
Benefits for employees
- Flexibility, workers get to decide when they work
- Not committed to one job. Great for those pursuing other endeavours
But like everything zero-hour contracts have their downsides…
Cons
The downsides for employers are…
- Poor reputation: There is still a stigma surrounding zero-hour contracts
- Staff shortages : Staff can refuse work offered to them
- Less Control : As employer will not be providing job security they are unable to prevent staff from working for others.
Downsides for employees
- No guaranteed salary: As the amount of work available can fluctuate
- Difficulty getting finance: Securing payments like mortgages, rent and even car finance can be difficult without guaranteed wages
- Zero-hour workers are not employees and as such are covered by basic rights only.
There are a few myths still surrounding zero-hour contracts which are taken as common knowledge but are a violation of worker rights, and as such should be avoided.
Do workers on zero-hour contracts still get paid holidays?
They still accumulate holiday pay the same as everyone else, all employees are legally entitled to 5.6 weeks of paid holiday a year.
What about any other forms of paid leave?
Along with paid holiday. They may also be entitled to maternity/paternity pay along with SSP (Statutory Sick Pay) but these are not guaranteed to them, the worker may take the time off as they do not have to make themselves available for work.
Okay, but I don’t have to have any of this in writing?
You certainly do! Any contract given to workers must be given in writing and recent changes require you to hand the contract by day one of work.
To conclude, it’s crucial you state within the contract that as an employer you don’t intend to create an employment relationship. There are several things you should consider when drafting a zero-hour contract like how the individuals’ contract will be brought to an end, how entitlements will be accrued and more. If all this seems daunting and you don’t know where to start. Get in contact us over at https://www.orchardemploymentlaw.co.uk.