Zero hours contracts

Because contracts can agree any terms that are not prohibited by law it is possible for an employee or worker to have a contract which allows them to vary the hours to suit their need for workers at any particular time.

Contracts that allow employers to reduce the hours of work for an employee or worker to zero and so allow them not to give work to the employee or send them home when they are not required have become known as 'zero hours' contracts.

Zero hours contracts may allow an employee to refuse work that is offered which may make the contract more of a casual employment relationship than a contract of employment.

Exclusivity clauses in zero hours contracts

In some zero hours contracts the employer also requires that the employee does not work for any other employer so they will always be available for work even though no work may be provided.

From 26 May 2015 exclusivity clauses in employment contracts will be unenforceable and so the employee cannot be prevented from taking other work if none is being offered by that employer.

[Section 27A Employment Rights Act 1996]

Employment rights under a zero hours contract

The employment rights that apply to a zero hours contract will be the same as for any other contract so rights such as National Minimum Wage, Working Time Regulations, discrimination, unfair dismissal and redundancy all may apply.

Difficulties in applying some employment rights may arise because of showing continuity of employment that some rights require or employers simply not offering work when certain issues arise such as sickness.

Problems with zero hours contracts

Whilst zero hours contracts offer significant flexibility for employers and employees there are some significant problems with being employed on a zero hours contract:

  • rights related to termination of contracts may be difficult to apply because employers can offer no work without terminating a contract so rights such as redundancy or unfair dismissal may be sidestepped
  • employers have wide discretion on how work is offered and who to which may lead to unfair work allocation which may be difficult to challenge
  • employers may withhold work from some employees who do not accept offers of work
  • work may be withheld as an informal disciplinary sanction without a proper process being applied
  • intermittent work and income makes planning of other matters difficult 
  • rights to sick pay and Statutory Sick Pay may be affected

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Zero increases by 26%

The Office for National Statistics has released new figures that show nearly 700,000 people work on zero hours contracts - up 26% from last year.  The problems caused by these contracts will require a significant change in the law.

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