Is your zero hours contract really a zero thought contract?

Vote in our poll – do you use zero hours’ contracts?

Today’s myth buster is around the idea that people on zero hours contracts have no rights. Nothing could be further from the truth.

  1. Zero hours contracts mean no commitment.  Employment tribunals look at the real relationship and arrangements – not just the paperwork. If you regularly book someone you may find your contract is no longer zero hours. The employment appeal tribunal have already ruled on this (Pulse v Carwatch)
  2. No holiday pay? Despite the headline news you don’t have to be an employee to qualify for holiday pay – even self employed workers qualify for holiday pay if they are obliged to do the work in person. The employment appeal tribunal have already ruled on this (Lyons v Mitie Security Ltd)
  3. Zero holiday pay? You don’t calculate zero hours workers’ holiday on the basis of nil hours per week, but on by averaging the previous 12 worked week’s pay.
  4. Zero rights? All workers in the UK have some rights including equality/discrimination and health and safety rights. The number of hours you work doesn’t change that.

If we could abolish all of employment law today there would still be real reasons for employers to consider whether zero hours contracts are appropriate to the organisation.

  1. Continuous service provision is hard to handle against random and casual workers if they are the core of your workforce – they can all say no to working today!
  2. Workers who have no normal hours can’t save or spend much and this is bad for the economy in general (they can’t get credit!)
  3. Annual hours contracts are more appropriate if you need flexibility
  4. Term time only contracts can work where parents can take the school holidays off

For the growing small business there is a place for zero hours contracts – as a temporary way of employing people where you don’t know what the work is needed. For a large business this is a temporary a way of handling rapid expansion.

But to ask people to be available to you as and when, without paying them, and expecting them to provide great service to your customers is not going to work for a number of businesses – regardless of the law.

Many bosses will find themselves on the wrong end of holiday pay claims, and unfair dismissal claims that the zero hours contracts won’t avoid. Unless you really know what you are doing zero hours is a trap!

Deciding on the appropriate contractual framework for employing people in a growing business is a skill. Get it right and you have got your costings right and all the flexibility you need. Get it wrong and you end up owing things like holiday pay you didn’t budget for – and you can have a less committed workforce than the one you want.

We speak to businesses about how to decide on the appropriate structures to get what you want (and we write great contracts too).  Talk to us call 08452 303050 (local rate calls) or use our contact form..

Related articles:

1m workers on zero hours contracts

Cable to investigate?

One way street?

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3 Comments

Filed under contract, employment law, flexible working, zero hours

3 responses to “Is your zero hours contract really a zero thought contract?

  1. Pingback: Is your zero hours contract really a zero thoug...

  2. Pingback: Zero-hours contracts cover more than 1m UK workers | UK news | The Guardian « Olduvaiblog: Musings on the coming collapse

  3. A very interesting article. Zero hour contracts often cause confusion when it comes to employment law. It is important that if you are on a zero hour contract that you do know your rights and that companies who employ workers with a zero hour contract understand the employment law around them.

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