There has been much discussion recently about the use of controversial ‘zero hours’ contracts. Many see them as exploitative of workers; however flexibility can prove invaluable to employers in certain circumstances, meaning they are unlikely to go away anytime soon.
If you use, or are considering using zero hours contract, it’s crucial to understand what they are, when they can and should be used, and what the implications are for employer and employee alike. There are two types of zero hours working arrangements, and in this article we explore what each means, the difference between them, and provide guidance on selecting the right zero hours arrangement for your business.
Zero hours employment contracts
There is often confusion between zero hours employment contracts and casual worker agreements. Many managers mean a casual worker agreement when they use the term ‘zero hours’ but in many cases, an employment contract with very flexible hours would be more appropriate, and fairer to the individual.
An employment contract with a zero hours provision will offer employment status, with the consequential benefits, protection and rights. The individual will be an employee the same as his or her colleague, only their hours are so flexible that the employer cannot offer a guaranteed minimum.
One of the key reasons often given by employers for wanting zero hours contracts is the flexibility they provide, however it is still possible to achieve flexibility in the context of a proper employment contract, possibly with a guaranteed minimum number of hours incorporated.
If any kind of guaranteed minimum is not possible but the worker will inevitably be in work regularly, or you want to be able to insist they work shifts offered, then it is still possible to put zero hours in the contract, with holiday and other benefits being calculated on the basis of actual hours worked.
If you expect the worker to be part of your organisation, and want to develop a relationship with them, and want them to be reliable and regular, and want to develop them and their skills, but just without guaranteed hours, then you should give them an employment contract with a flexible hours clause.
Zero hours casual worker agreements
A casual worker agreement is also ‘zero hours’ but without employee status. A casual worker arrangement only confers ‘worker’ status, and offers very little in terms of benefits, protection and rights for the worker. There are zero hours guaranteed to the individual and cannot be any obligation on them to accept an offer of work. If the work is very seasonal or temporary, or more irregular, or you don’t want or need to develop a regular working relationship with a particular individual, casual worker agreements might work best.
Before going ahead with casual worker zero hours contracts, consider whether this is for the right reasons, and whether the work will genuinely be casual, or whether there is an element of trying to avoid responsibilities. As well as the risk that this may be challenged in an employment tribunal, morally it should not be up to the employee to claim their rights and a responsible employer will ensure employees benefit from the appropriate protection they are entitled to, and place workers on a contract or agreement which accurately reflects expectations and obligations on both sides.
As well as ensuring your workers are placed on a fair and accurate contract type from the start, make sure you continually assess the situation, to make sure the agreements you have reflect what is actually happening. Something that starts as casual or very flexible often drifts into something more regular, and if you find this is happening, or are starting to rely on a particular worker and would like to guarantee their availability and reward a growing relationship you may want to consider moving them to an employment contract.
Also review the hours worked by those on zero hours employment contracts – if you have someone on no guaranteed hours but find that in reality they are always working at least a certain number of hours each week, you should consider replacing their zero hours with a guaranteed minimum.
Flexibility is great but it works both ways, and by ensuring your contracts treat your workers fairly as well as achieving what you need, you should also benefit from a more productive and engaged workforce, as well as a reputation as a responsible caring employer.
If you’re not sure of the implications of the two types of zero hours working arrangements, do get in touch.