Zero hours contracts – so are they a good idea or not?

Employment contracts are not normally the kind of thing that regularly make the news however, zero hours contracts have a regular place in the headlines and in the opinions of politicians and much of the general public.  They have again recently been in the news, as the Taylor review, an in-depth review of employment practices commissioned by the Prime Minister, was published.  The report did not recommend the end of zero hours contracts, but did have a concern that some companies were too reliant on such, where they perhaps could offer a more secure alternative to their employees.

Zero hours contracts can be very popular with employees.  One of the most common uses of such a system is bank staff in a healthcare setting, which can fit very well amongst employees’ other personal commitments and offers employers flexibility in covering sickness absence for example, without the cost of recruiting people with fixed hours.

However, by their nature they do not offer much security and this is what has led to some bad press.  If an employer routinely offers such contracts but in fact expects the employees to work a certain number of hours regularly, it is unlikely that zero hours contracts are the most appropriate.  Don’t forget that employees on zero hours contracts have no obligation to accept work, just as an employer has no obligation to offer it.

Remember that those on zero hours contracts, if they work, are entitled to benefits in line with other employees, so they will accrue annual leave, are entitled to be auto enrolled in a pension (if they earn enough) and should receive any other benefits you offer, pro rata to their working hours, where appropriate.

Lastly, employers are no longer allowed to write exclusivity clauses into zero hours contracts.  These are when employers do not guarantee work, but require employees to nevertheless be available for work at all times, denying them the ability to work elsewhere.  It seems clear that such clauses could cause financial hardship and for that reason were banned.  Therefore, employers should be careful when drafting such contracts, as their terms can and sometimes should differ from other forms of employment agreement.


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