What’s the appropriate use of Zero hours Contracts?

What’s The Appropriate Use Of Zero Hours Contracts?

Linkilaw Employee Regulations

News brief!

You’ve probably seen Uber and Lyft in the news a lot recently. Just incase you haven’t, they’ve been fighting a legal back and forth following a state assembly vote in favour of a three-point system for classifying California workers as either employees or independent contractors.

Recent emergence of Gig Economy businesses, where the job market offers “temporary positions and organizations contract with independent workers for short-term engagements”, has lead to employment law scrutiny from drivers. What’s more, in the wider jobs market, the rights of workers in more informal employment conditions have been hotly contested.

The “gig” status of Uber and Lyft drivers is not unique to the Gig economy and debates around the kind of rights and entitlements that casual, independent or freelance workers receive is often an area of legal dispute.

One difficult legal area surrounds the Zero hours contracts used for casual work.

Whilst these contracts don’t seem to have the same depth as a standard employment agreement contract, from an employers perspective it’s important to know what your casual workers are entitled to under a Zero-hours.

Following guidance from the Department for Business, Energy & Industrial Strategy, let’s unpick some misunderstood aspects of the zero hours contracts.

What are Zero Hours Contracts?

Also known as casual contracts, Zero hours contracts will be used for work where:

  • The worker is on call to work when you (the employer) need them
  • The worker does not have to do the work when asked
  • You do not have to give the worker any work.

Status of the worker?

Individuals on a Zero-hours will either have the employment status of a ’worker’ or an ‘employee’.

According to the UK Government guidance on Zero hours contracts: “any individual on a zero hours contract who is a ‘worker’ will be entitled to at least the National Minimum Wage, paid annual leave, rest breaks and protection from discrimination”.

What entitlements do Zero-hours workers share with regular employees?

  • Statutory annual leave
  • National minimum wage
  • Statutory rights around travelling time and waiting time

What’s the appropriate use of Zero hours contracts?

  • Used for work that is irregular in nature
  • Where there is not a constant demand for staff
  • When it allows an individual to work around other commitments (e.g. studying or childcare)

Some examples of appropriate use: 

  • New businesses: Starting up may require a business to employ people on zero hours contracts on top of any permanent staff to help with unpredictable demands.
  • Seasonal work: where it is known that for short periods of time additional staff are needed such as retail sales at Christmas time or where there is a surge in demand.
  • Unexpected sickness: When covering periods of staff sickness and where experienced staff are required on demand, for example, a lifeguard at a leisure centre.
  • Special events: restaurants or bars often need experienced staff when a function is booked or when they require quick staff support.

It’s key to be aware of these kinds of cases as well as entitlements that a Zero-hours gives to a casual worker. Ultimately, being familiar with these will help you and your business to avoid tricky and costly cases like those facing Uber and Lyft.

If you have any doubt regarding employment law or need help with your legals, book a call with our legal team and we’ll guide you through every stage of your legal needs.

Zero Hours contracts