Zero Hours Contract Guidance

The Government has issued new guidance about controversial zero hour contracts.

The Department of Business, Innovation and Skill published a comprehensive guide on 15 October 2015, and it is available through the gov.uk website.

At a time when 2.4% of the total working population are employed through zero hours contracts, it is important that employers and employees alike have a better understanding of what this ‘non-legal’ term actually means. The guidance provides some much needed clarification of recent legislative changes, which were brought in to reduce the perceived hardship caused by these contracts.

In brief, a zero hours contract is casual arrangement between an employer and an individual, who may be classified as a worker or an employee depending on their intended status and the way in which they work day to day. They are flexible from both parties’ points of view, as the employer does not have to guarantee any level of work to be provided, so the individual is simply paid for the work they carry out.

Whilst the benefits are clear for employers, the increased use of zero hours contracts has led many to question whether there is any reciprocal advantage for the individual. There have been numerous reports of abuses of zero hours contracts, with claims that the vulnerable workers in society are particularly affected, who are often considered to have no real choice but to accept these insecure working arrangements. However, some students and those with other commitments have reported that this kind of employment can work well.

The guidance is explicit in noting that would-be employers must pay at least the National Minimum Wage, provide the minimum level of annual leave, rest breaks and protection from discrimination. In addition, workers who are given ‘employee’ status will acquire a host of statutory employment rights. Employers must ensure that both parties are clear about the worker’s status and employment rights from the outset.

The message appears to be that employers must be clear and transparent with individuals taken on to work under zero hours contracts. They should be treated with the basic rights and entitlements as other workers/employees, depending on their individual classification and under no circumstances can an employee be expected to work exclusively for the employer where they are employed under a zero hours contract.

It is always sensible that as an employer, you have well-drafted and comprehensive contracts when recruiting new staff. Similarly for employees, you should be confident of your rights and entitlements when considering accepting a zero hours contract.

If you require any help or assistance about casual working issues, please contact one of our Employment Team today who will be more than happy to assist.