Zero Hours Contracts – Where do Employers Stand Legally?

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“Zero Hours” contracts have attracted a lot of negative publicity since they first came to the attention of the media, politicians and the public. Despite the furore surrounding these types of contracts, they are actually perfectly legal and a legitimate way to employ staff where used properly. In fact recent statistics show that the numbers of workers engaged on “Zero Hours” contracts has actually risen by around 20% over the past 12 months to around 900,000.

Here is some information for employers on how they can utilise zero hours contracts effectively and fairly.
A zero hours contract is a type of employment contract between an employer and a worker, where the employer is not obliged to provide any minimum working hours and the worker is not obliged to accept any work offered. Although only coming to the public’s attention over the past couple of years, these types of contracts have actually been in use for many years, particularly in the hospitality, leisure and care industries.

Whilst using zero hours contracts is a legal way in which to employ workers, it is now illegal for employers to include an exclusivity clause that restricts workers from undertaking other employment. This is due to the controversy that began to emerge about the use of zero hours contracts; with some employers taking advantage of their flexibility, insisting on exclusivity despite the fact that they were not guaranteeing any work on a weekly or monthly basis. Employees engaged in a zero hours contract with one employer is now able to seek and undertake working hours from other employers.

Another thing for employers to be mindful of is if irregular shift patterns of workers on zero hours contracts actually turn into regular hours, therefore reflecting the working patterns of an employee on a permanent contract with fixed hours. Under such circumstances, the ‘zero hours’ employee(s) could be deemed as ‘regular employees’ and will therefore need to be afforded the relevant employment benefits, such as holiday entitlement. In order to avoid falling foul of this eventuality, employers should undertake a regular review of the shift patterns of those workers on zero hours contracts and be sure to switch staff onto permanent contracts with minimum guaranteed hours as appropriate.

Although remaining somewhat of a thorny issue, the statistics at the start of this article indicate that many employers are managing to use zero hours contracts effectively in their businesses. For further advice in relation to zero hours contracts, or any aspect of employment law, please contact our team of employment law solicitors.