Zero Hours Contracts frequently gain a bad press. Their use (or “abuse”) is often derided as the sign of bad employer.
There is a place for zero hours contracts for some employers. The flexibility that zero hours contracts can provide to employers (and to employees) is often of considerable use – particularly in certain industries where demand can fluctuate considerably – such as farming and tourism.
The use of zero hours contracts is, however, on the rise. This can lead to various issues for employers.
There is often the perception that zero hours contracts are easy to terminate. The notice provisions in such contracts may be relatively minimal (frequently at statutory minimum levels, and with no minimum level of work due to be provided within a notice period). The termination of a zero hours contract is a “dismissal” in law. That means that someone employed under a zero hours contract for two years or more may have ordinary unfair dismissal rights. Frequently employers don’t follow fair processes when terminating employees employed on zero hours contracts, making dismissals unfair.
Whether or not a zero hours worker is legally an “employee” will depend on the precise facts of a case – but such a worker is almost certainly a “worker” for the purposes of the Working Time Regulations and will therefore be entitled to annual paid holiday pay and the national minimum wage. They are also entitled to protection against discrimination and whistleblowing dismissal or detriments.
How do you fairly end a zero hours contract? Redundancy? How could you show that you no longer have a need for an employee who has no fixed hours of work?
Our advice would be that zero hour contracts can be a useful tool, but they should be utilised only where strictly needed and that if there is no requirement to keep the contract going, to have fixed term zero hour contracts, or to terminate them at the end of a specific assignment – rather than having a bank of rarely used workers still on the books, unnecessarily.
If you would like any help on the points above then please do not hesitate to give us a call 01924 827869, the team will be happy to help.