Don’t be spooked by zero hours contracts
Zero hour contracts have taken a beating. Yet as a flexible alternative to full and part time employment they can be useful to both employer and employee. In some instances however, they are being exploited by rogue employers. Such practice can lead to workers lives being unfairly insecure: knowing that their ability to pay the rent at the end of the month may be down to chance. Hence the bad reputation for zero hours contracts.
Regardless of the debate surrounding the use of zero-hours contracts, they are here to stay. The Department of Business, Innovation and Skills has therefore urged businesses to learn how they should use them, highlighting when they should and shouldn’t be considered. The idea being that if businesses understand them, the contracts can continue to benefit employees that truly gain from their flexibility such as students, home carers and retirees looking for casual employment.
A zero hours contract means that an employer is not obliged to provide a set number of hours of work for the employee, giving them no stability of income. In such an agreement an employee could be asked to work almost full time hours, or no hours at all. So how should an employer use them and what must they guarantee the employee?
First things first. All zero hours staff are entitled to the National Minimum Wage (which rose at the start of this month), and all statutory employment rights including paid annual leave, breaks and protection from discrimination.
Zero hours contracts can help established businesses cope with fluctuating demand, new businesses get onto their feet and also in providing cover for unexpected sickness. But it’s recommended that businesses consider the alternatives, rather than going straight to zero hours contracts as a solution.
- Offer overtime to current permanent staff
- Recruit a part time employee or someone on a fixed term contract if regular hours need to be worked
- Offer annualised hours contracts to cope with seasonal demand
- Bring in agency staff as a quicker and easier way to hire
If an employer opts to go ahead and hire staff on zero hours contracts they must ensure that they comply with providing employment rights. To help staff plan ahead, it’s best practice for an employer to give them as much notice as possible regarding possible working hours, ensuring they understand that they can either accept or refuse the work.
As of May this year, employers operating zero-hours contracts are no longer allowed to use exclusivity clauses. These had prohibited staff from seeking or accepting work from another employer. From May onwards therefore employees are able to seek additional employment if, for example, they’re not working enough hours under their current contract.
If you currently operate zero-hours contracts, or have considered them and would like assistance and guidance on how to use them properly, please get in touch with us at The HR Dept.