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Is a ‘Zero Hours Contract’ ever appropriate?

‘Zero hours contracts’ have been in the news recently, with employers being criticised for using these contracts inappropriately and, in some cases, using exclusivity clauses.

What is a Zero Hours Contract?
Generally speaking, a zero hours contract the employer does not guarantee the individual any hours of work. The employer offers the individual work when it arises, and the individual can either accept the work offered, or decide not to take up the offer of work on that occasion. The employee is entitled to the same employment rights as any other employee.

The Small Business, Enterprise and Employment Act now prohibits employers from including exclusivity clauses or terms in any zero hours contract. This means an employer cannot stop an individual from looking for work or accepting work from another employer.

The government has provided detailed guidance on zero hour contracts as to when such contracts are appropriate or inappropriate. Some situations where zero hours contracts might be useful are listed below:
New businesses – because of fluctuating and unpredictable demands while building up a customer base.
Seasonal work – when additional staff are needed to manage increased demand at certain times of the year e.g in a holiday let business over the summer months or in retail sales at Christmas.
Unexpected sickness – suitably qualified staff need to be available to cover periods of unexpected staff sickness, examples given include a pharmacist in a chemist or a lifeguard at a leisure centre.
Special events – A venue, restaurant or a bar may need to be able to call on trained and experienced staff when functions are booked.
Testing a service – A business may be testing a new service they are thinking about providing, and hire staff on an ad hoc basis to test its viability.

Zero hours contracts can allow flexibility for both employers and employees. However the do not allow employers to avoid their responsibilities. All employees, regardless of their contract, are entitled to statutory employment rights and must be treated fairly and within the law.

Government guidance can be viewed at www.gov.uk