Zero hours contracts have become increasingly popular in the UK, particularly with the growth of the gig economy, the Economics Online report 1.8 million workers in the UK are on zero hour contracts, and the Office for National Statistics has reported a 300% increase in zero hour contracts since 2000.
A zero hours contract is an agreement where the employer is not obliged to offer the employee any hours of work, and in return, the employee is not obliged to accept any hours of work. The contract should be clear on the employment status, what the employee will get paid for any work carried out, and also what would happen if they continually turned to work down.
Zero Hour Contract Employee rights
By law, employees on zero hours contracts, have the following rights;
- To be paid at least the National Minimum Wage or National Living Wage;
- Holiday pay;
- Rest breaks in line with the Working Time Directive;
- Paid for work-related travel;
- Paid for being on call;
- Protection for whistleblowing;
- Protection against unlawful discrimination; and
- Protection against unlawful deductions from wages.
Employers can not stop employees on zero hours contracts from working for another Company, regardless if there is an ‘exclusivity clause’ in the contract of employment, or treat employees unfairly for working for another Company.
It is vital for employers to clearly define the employment status as part of the contract of employment, to avoid any area of doubt and ensure employees are treated fairly. The three main types of employment status are; employee, worker and self-employed. Individuals on zero hours contracts would generally be defined as either an employee or worker, but depending on which category they fall in, would affect their legal employment rights.
For example, can an employer terminate an employee on a zero hours contract without notice?
If the employee is defined as a worker, then the individual will not have any statutory rights to a notice period, and an employer could terminate the contract without notice.
If the employee is defined as an employee, then the individual will be eligible for statutory notice.
Generally, those on zero hours contracts would be classed as workers as there is no mutuality of obligation.
What is good practice?
- Only have zero-hour contracts in place where the flexibility of the arrangement suits both the employee and the company.
- Ensure rate of pay is comparable to people doing the same job on different types of contract.
- Individuals on a zero-hour contract should be given a written copy of the terms and conditions of employment, issued on the 1st day of employment. The terms and conditions should clearly define the employment status and the rights and obligations of the employee.
- Conduct regular performance reviews with those on zero-hour contracts in line with the company’s policy for permanent employees.
- Training and development opportunities should be made available for employees on zero-hour contracts.
- Employers to provide reasonable compensation to employees on zero-hour contracts when work is cancelled with little or no notice.
- Can an employee refuse hours on a zero hours contract?
There is no obligation for an employee/worker on a zero-hours contract to accept any hours of work. Employees/workers will only be paid for the hours they do work.
- Are employees on zero-hours contracts entitled to redundancy?
If the individual on a zero hour contract is classed as an ‘employee’ then they will be entitled to statutory redundancy, if they meet the qualifying criteria.
Workers are not entitled to redundancy.
If you would like further guidance on the above please contact Clover HR on 0121 516 0299 or email us at email@example.com