There has been much controversy surrounding the issue of zero hour contracts in recent months.
An official figure released by the Office of National Statistics (ONS) reports an estimated 1.4 million ‘zero hours’ workers are currently employed throughout the UK. However Unions are calling for the contracts to be banned, amidst claims that many employers are abusing the flexible working they provide and paying workers less than the living wage.
Under the terms of a zero hour contract, employees must be available for work as and when required, however have the right to turn down any work without question or penalty from the employer.
Whilst they do not guarantee a fixed income, under the National Minimum Wage Act 1998 employees are entitled to receive the minimum wage for any hours that they do work. Despite no evidence to suggest that employers are breaching minimum wage regulations, reports have found that the average hourly wage for a zero hour worker is considerably less than for those employed on guaranteed hours. Leading many to question whether the contracts are simply a way for employers to source cheap labour in exchange for low pay and uncertain hours.
For many, the flexibility offered by zero hour contracts is an attractive alternative to full time employment and when used correctly can benefit both the employer and the employee equally. For example, students and working parents juggling education or family commitments. Individuals nearing retirement may also appreciate casual working hours as a means of phasing out full time employment. Furthermore, despite the recent media attention, zero hour contracts have been successfully used in the catering and hospitality industries for many years now, proving that they can work for some.
For employers, they are an increasingly effective solution to short term staffing demands and are often used by businesses who require a pool of surplus staff for ‘on call’ work. And it could be argued that the recent surge in zero hour contracts reflects Britain’s modern workforce and the diversifying needs of its workers, as many attempt to manage the increasing demands of work and family life.
However with that being said zero hour contracts are not for everyone and uncertainty surrounding regular income can be a daunting prospect for many.
Employers should also be aware of their obligations as a zero hours employer, specifically the Minimum Wage and Working Time Regulations, which outline the rights of workers in relation to payment and in some circumstances, the payment of accrued or untaken holiday. Whilst zero hour contracts are not yet defined in legislation, meaning employment rights are somewhat of a grey area, if an employment tribunal finds that the contract imposes mutuality of obligation, workers will be entitled to exactly the same rights as other employees, including unfair dismissal and redundancy pay. As it is very likely that a tribunal will find this to be the case, any employer who is thinking about hiring flexible working staff would be advised to clearly define the terms of the employment contract at the start of the working relationship to ensure that you are both aware of your rights and responsibilities to one another.
If you require any further advice or assistance in relation to zero hour contracts please feel free to get in touch by telephoning 01535 613 673 or emailing firstname.lastname@example.org.
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This blog has been prepared by AWB Charlesworth LLP as an overview of the legislation and does not constitute advice on any specific matter. You should not take any action in relation to it without taking detailed legal advice.