Zero Hour Contracts

Are you using them correctly?…………..


Zero Hours Contract

Are you currently using zero hours contracts in your business, or are you considering using zero hours contracts?

A zero hour contract is an agreement to employ an individual, as and when required, to fill a role, but when there is no commitment to any minimum number of working hours.


Important points about Zero Hour contracts:

  • The individual is not contracted to work a set number of hours and is only paid for the number of hours that they work.
  • They are normally used when business is seasonal, or where demand for work can fluctuate and the requirement for workers in unpredictable.
  • It can offer flexibility for employers to hire staff to work alongside their existing workforce.
  • Individuals can sometimes find it difficult to accommodate fluctuating hours that are presented to them when working on a zero hours contract, however some individuals find that it provides them with the flexibility that they are looking for.

Contracts are important when it comes to hiring zero hours individuals, for lots of reasons, including the following:

  • The contract should include terms and statements that make it clear that the worker is employed on a zero hours basis and not a casual basis.
  • The contract should provide for annual leave and that holiday entitlement will be due based on hours work.
  • Exclusivity terms in contracts are unenforceable for zero hour contract employees.
  • Engaging individuals under a zero hour contract could give rise to an employment relationship, so terms need to be written carefully.
  • Reviewing zero hours contracts on a regular basis is important to ensure that the contract reflects what is happening in practice

A casual worker contract will normally have no obligation on the employer to offer work or on the individual to accept work. A zero hour contract will make clear by statement that the employer is under no obligation to offer work. In addition to this, the individual is obliged to be available and to accept work, with exception to periods notified to the employer in advance when the individual is not available for example sickness or holiday.

In May 2017 it was reported that half of the people employed on zero hour contracts incorrectly assumed that they were not entitled to paid holiday. Employers need to take into account the holiday entitlement, holiday entitlement is calculated at 12.07% of the hours worked by the individual.

Zero hours contracts are quite often in the news, trade unions are known to publicly criticise the use of employment contracts. In January 2018 there was a second reading of a bill to ban zero hour contracts, however there is no immediate change to the way that they will be used by employer.

Personnel Today reported in April 2018 that zero hour contracts increased by 100,000 in the year to November 2017, making up 6% of all contracts.