“Zero Hours Contracts” is a term used to describe employers hiring staff with no minimum level of work or pay. Workers are engaged on an ad-hoc or casual basis and are only paid for the work they actually do.
Statistics indicate that there are over 900,000 people in the UK working under ‘zero hours’ contracts, a 20% increase on last years data.
Zero hours contracts need to be properly understood. Technically they’re not illegal but they are regulated. Individuals that are engaged via these contracts can be legally classed as “workers” or “employees”, therefore they qualify for rights such as holiday pay and the minimum wage. There is often a clause in zero hours contracts prohibiting the person from working elsewhere known as an ‘exclusivity clause’, however we believe that is unenforceable in law. Whilst the flexibility of zero hours contracts can be advantageous to both the employer and the worker, their use does lead to job insecurity for the workers and potentially negative publicity. PR for the employer. One only has to look at the bad examples that hit the popular press, for example Sports Direct. Did you know there is even a “zero hours wall of shame“?
We suggest that zero hours contracts can be a good flexible employment tool, providing it is used fairly, and benefits the worker as well as the business. BUT as a business, we recommend that you carefully consider whether or not zero hours contracts are the most appropriate and beneficial option for your business, and be prepared to justify using them.
Michelle Scanlan-Sanson says: “Back on 26 May 2015 there was a lot of media hype following a government report which identified that exclusivity clauses within zero hour contracts are banned and are no longer enforceable. The zero hours contract allows an employer to engage workers on zero hour contracts, which does not provide workers with a minimum number of hours but for want of a better term puts them on call or standby while they have no immediate need for them. However, the employer can no longer prohibit these workers from taking up alternative work elsewhere…so they are now free to work for multiple businesses on a zero hour contract. Even if you have a worker on a contract with an exclusivity clause prior to this date…this clause is no longer enforceable.”
- Do you use zero hour contracts in your business? How do they benefit you and your staff? Add your comments below?
- Would you benefit from some support from your peers? your fellow members? Login to one of our peer support groups to access their thinking.
- Would you like some professional advice and guidance? We have several members ready to help you professionally in our Directory
- The Guardian More than 900,000 UK workers now on zero-hours contracts
- BBC News: Zero-hours contracts rise to 903,000 workers
- The Week: Zero-hour contracts: are they fair and why the controversy?
- Wikipedia: Zero-hour contract – Wikipedia
- Money.co.uk: Zero hour contracts: The pros and cons
Daniel (Dan) Carey MCMI
Partner: Bentleigh & Cavanaugh
Board Member: Business & Management Wessex
Board Member: The Chartered Management Institute
Dan is one of the architects of the Business & Management Support Service – The UK Peer and Professional Support Service signposting resources and support for members who are primarily business owners, entrepreneurs, leaders and managers in the UK. A qualified manager, lecturer, assessor and business adviser with a wide cross sector experience in business administration, management, marketing and commercial finance, Dan is retained by a number of businesses on an embedded basis, and consults with others, to help them become more effective and profitable, and to help the key players become more enhanced and effective managers.