Zero hours contracts

A client had been reading the media coverage of “zero hours contracts” but wasn’t sure if she should introduce them because she wasn’t sure of the pros and cons of doing so.

Zero hours contracts are usually for staff on ‘piece work’ or ‘on call’ work. This means:

  • they are on call to work when the employer needs them;
  • the employer doesn’t have to give them work;
  • they don’t have to do work when asked.

From the employers viewpoint

  • Such contracts are attractive for an employer who wants a bank of casual staff available whenever they need them. They are often used where a company has periods of high demand.
  • There is no obligation on an employer to provide a minimum amount of work although the worker is obliged to be available for any work which is offered to them. The worker is not paid to be on call, but only paid only for the hours they actually work.
  • Such contracts allow a business to minimise its labour costs thus being more profitable and able to expand and employ more people;
  • The employer is still responsible for health and safety of staff on zero hour contracts.

From the employees point of view

  • Some employers are using zero hours contracts in order to avoid employment law obligations;
  • Workers under such contracts have no guaranteed paid work;
  • Workers can be sent home from work without warning and without having earned anything;
  • Some workers may have difficulty in claiming benefits;
  • Students might find zero hours contracts work, particularly if they are employed by a business whose peak period of activity falls over the summer period when students are normally on holiday;
  • By entering into a zero hours contract it gives that individual a much greater chance of being offered work than someone previously unknown to the employer;
  • Some zero hours contracts restrict the worker from working for anyone else in order to guarantee their availability on demand;
  • A worker who turns down work is likely to be removed from the staff bank list or simply not offered work in the future.

Although only recently in the news, a survey carried out only a few weeks ago found that about 4% of the UK workforce were already on zero hours contracts. They do have their advantages but each case should be viewed on its merits. As business advisors our advice is always to speak to the experts be that a legal company or HR specialists. If you contact Ian Perry he will put you in touch with one of Remedy’s HR partners.

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