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Zero hours contracts – the facts.

When there is a seasonal demand for extra staff, offering students or others a zero hours contract may seem to offer an answer, but what does that mean and what are your obligations? This easy-to-follow guide points you in the right direction.

The words ‘zero hours contract’ themselves are not a legal term, merely an umbrella to describe many different forms of casual work agreements between an employer and an individual.

A zero hours contract is generally held to mean one in which the employer does not guarantee the individual any hours of work. The employer offers the individual work when it arises, and the individual can either accept the work offered, or decide not to take up the offer of work on that occasion.

The first thing to take on board is that regardless of the hours worked, it is a legal requirement to pay the National Minimum Wage relating to the person’s age. To check on these rates click on this link https://www.gov.uk/national-minimum-wage-rates

The Small Business, Enterprise and Employment Act prohibits the use of exclusivity clauses or terms in any zero hours contract. This means an employer cannot stop an individual from looking for work or accepting work from another employer.

An employer must allow the individual to take work elsewhere in order to earn an income if they themselves do not offer sufficient hours.

If an employer includes an exclusivity clause in a zero hours contract, the individual cannot be bound by it, the law states the individual can ignore it.

When offering a zero hours contract the government offer the following advice:

When offering a zero hours contract, employers should consider including information such as:

  • whether the individual is an employee or worker and what employment rights they are entitled to
  • if the individual is an employee, how statutory employment entitlements will be accrued where appropriate, for example, redundancy pay
  • the process by which work will be offered and assurance that they are not obliged to accept work on every occasion if they so wish
  • how the individuals contract will be brought to an end, for example, at the end of each work task or with notice given by either party. The information above is provided as general guidance only.
  • Our advice, as always on such issues, is that before embarking on such a course, take appropriate professional advice.

* UK Government Department of Business, Energy and Industrial Strategy.

Our advice, as always on such issues, is that before embarking on such a course, take appropriate professional advice.

The information above is provided as general guidance only.

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