The Government is to review the use of controversial ‘zero-hours’ contracts under which staff are put on standby and not guaranteed a minimum amount of work. The concern is that these contracts are now widely used but relatively little is known about their effect on employers and staff. Whilst it is important that the workforce enjoy flexibility, it is equally important that it is treated fairly.
Staff employed under zero-hours contracts are mainly casual workers rather than employees, and the defining feature generally is the absence of mutuality of obligation. In practice, this means staff can be given extra hours when it’s busy but see their shifts cut to zero when it’s quiet. In most cases staff are expected to be available for work but can legally turn down a shift if they don’t need it.
It also means, given that people employed under zero-hours contracts are usually workers, that these staff enjoy far less rights than if they were employees under a contract of employment; most notably they have no right to a notice period on termination of the contract, nor any protection against unfair dismissal, nor do they enjoy any of the family friendly rights.
While zero-hours contracts are, therefore, at least currently, a legitimate means of providing flexibility, it is important for employers to note that they are not the only option.
Permanent employment contracts can also provide all the flexibility of a zero-hours contract and still give certainty concerning employment status for both parties and offer greater employment rights for the member of staff. The way that this flexibility can be achieved is by including appropriate provisions which could include:
a ‘casual employee clause’ being incorporated within the employment contract
job descriptions being non-contractual to allow for changes
flexibility, mobility and variation clauses being included in the contract itself
A more flexible permanent contract containing these types of provisions means that the member of staff will be an employee, rather than a worker. Thus, as employees, they do then have the same rights and entitlements as permanent members of staff – the only difference is that there are no guarantees on the minimum number of hours’ work that they will be offered.
In today’s economic climate, it isn’t viable for employers to employ all staff on permanent contracts with set hours, and that’s why ‘zero-hours’ contracts have become more popular. As long as the employer has well-managed systems in place to support this type of contract, there is no reason why they can’t work for everyone. Employers also need to be more proactive about communicating the terms and conditions of such contracts at the outset to ensure employees understand their rights and what is expected of them.