Zero Hours Contracts

Zero-Hours contracts are a popular and flexible option for companies that wish to use casual workers where there is no guarantee of the amount of work available particularly, as the provisions that relate to employees in relation to notice periods and unfair dismissal can sometimes be avoided, which make them controversial.

They are not defined by any legislation but they are understood to be an employment contract between an employer and worker in which the employer is not obliged to provide the worker with minimum working hours and the worker is not obliged to accept any of the hours offered, although they typically agree to these hours.

A contract may be entitled a ‘Zero-Hours Contract’ and state that there is no employment relationship but a Tribunal or Court may decide that there is in fact an employment relationship by applying the ‘control test’ which focuses on the degree to which the person is able to decide when they work, how they work, the tools they use to work and whether they can sub-contract the work. If the employer decides these factors, it is likely the Tribunal or Court will decide that the degree of control is representative of an ‘employer and employee’ relationship rather than an ‘employer and self-employed contractor’ relationship.

Whether or not the above relationship exists an employer still faces a number of obligations, these include protecting their workers from any unlawful practices to include the relevant health and safety provisions to include discrimination. Zero-Hours workers are also entitled to breaks under the Working Time Regulations, have full pro-rata holiday entitlement and should be paid at least the national minimum wage. However, since they have breaks in their contract, this may affect certain rights that accrue over time.

Work is usually be offered at the company’s discretion, but if a long standing relationship develops with a continual and regular source or work, a tribunal or court may decide that the worker has obtained the full rights of an employee. An employer can seek to terminate an arrangement by no longer providing work. It is also possible for a company to terminate immediately for gross misconduct in the normal manner.

For informed and comprehensive advice as an employer or employee, please telephone 01267 237441 to arrange an appointment with our employment team.