Zero hours contracts have become quite common in the modern workforce, offering both flexibility and challenges. If you are employed on a zero hours contract, or are considering a job that offers one, this guide is for you.
In this article, we offer insights on the rights & responsibilities around zero hours contracts and answer some of the most common questions surrounding them.
What is a zero hours contract?
A zero hours contract is an employment agreement where the employer does not guarantee fixed working hours for the employee - they can change and alter week-by-week.
This type of contract offers lots of flexibility for both parties: the employer can provide work as needed, and the employee can decide whether to accept or decline the hours.
Whilst flexibility may seem great for some people, the arrangement also lacks guaranteed minimum hours, with employees being paid solely for the hours worked. This means that you wouldn't know exactly what you are guaranteed to work or make in money each month.
Zero hours contract examples
As mentioned, there are lots of jobs out there that offer zero hours contracts.
Some common examples of zero hours contracts include:
Casual Workers: Many industries, such as retail and hospitality, hire casual workers on zero hours contracts to meet fluctuating demand, especially during peak seasons or events. Did I hear somebody say they needed a Christmas Elf for Santa's grotto?!
On-Call Staff: Some healthcare professionals, like nurses or care assistants, may be employed on zero hours contracts for on-call shifts when required.
Event Staff: Companies organising events or conferences often hire event staff on zero hours contracts, as the demand for their services can vary based on the event's scale and nature.
Student Workers: Part-time or temporary student positions, where the employer needs assistance during specific periods, might be structured as zero hours contracts.
Freelancers or Consultants: Certain freelance or consulting roles may operate on zero hours contracts, where the individual is engaged as needed for specific projects or assignments.
Are zero hours contracts legal in the UK?
Yes, zero-hours contracts are legal in the UK. These contracts offer flexibility for the employer and workers.
The law that governs zero hours contracts is the Employment Rights Act 1996. Within the act, it states that if you are on a zero-hours contract, your employer must not:
try to stop you working for another employer by putting an exclusivity clause in your contract
treat you unfavourably if you also work for another employer
dismiss you for working for more than one employer
It is against the law for an employer to enforce a clause in your zero hours contract for any of the above reasons.
What rights do employees have under a zero hours contract?
Employees on zero hours contracts have many rights. Remember, your rights are based on your employment status, not based on you being on a zero hours contract, so you will still benefit from various protections.
Your rights include:
Right to National Minimum Wage
Statutory Annual Leave
Protection from Discrimination: Zero-hours workers are protected from discrimination based on age, gender, race, disability, and other characteristics.
Statutory Sick Pay
Training and Development Opportunities
Right to Request a Predictable Work Pattern: Zero-hours workers can request a more predictable work pattern, bringing stability and certainty to their schedules.
This is not a full and conclusive list, so it is important to check your employment status to see what your full range of rights are.
Detriment and dismissal under zero hours contracts
If you are on a zero hours contract, you have the right to be free from employer mistreatment of your employment status. This includes being denied work opportunities or maltreated compared to colleagues on different contracts.
For example, if you asked your boss for the same rest breaks as another employee that has a permanent contract, (because those are your rights and you are entitled to this!), your employer cannot treat you worse or make your situation worse.
So, what would maltreatment look like? Well, if your employer started bullying or harassing you, or even reduced your hours, this would be maltreatment and it is against the law to behave in this way.
You will also be glad to know that you are protected from unfair dismissal. Employers cannot dismiss you unfairly based on your employment status or for asserting your rights related to your zero hours contract.
In addition, after a certain period of continuous employment, you gain enhanced employment rights, including protection from unfair dismissal. Continuous employment typically accumulates after two years of service.
If you believe you have been unfairly dismissed or subjected to detrimental treatment due to your employment status, you can bring a claim before an employment tribunal.
Can you work for more than one employer on a zero hours contract?
Absolutely! People on zero hours contracts have the freedom to work for multiple employers at the same time.
Unlike traditional full-time contracts that may have exclusivity clauses, which prevent employees from taking on other jobs, zero hours contracts usually don't have such restrictions.
Are you entitled to rest breaks in a zero hours contract?
Yes, you are entitled to rest breaks in a zero hours contract as per employment regulations. Everyone needs to take a break when working a certain number of hours- so crack open the Kit Kats!
Rest breaks are governed by the Working Time Regulations 1998. Generally, adult workers are entitled to a minimum 20-minute break if their daily working time exceeds six hours.
Flexibility of zero hours contracts doesn't excuse employers from providing rest breaks. You should discuss and agree on suitable arrangements with your employer. Rest breaks are often unpaid, and the specific details regarding when and how they are taken may vary based on your individual agreement with the employer.
It is important to note that certain industries or roles may have specific provisions or exemptions regarding rest breaks. If this is the case for you, familiarise yourself with industry-specific regulations.
What is the notice period for a zero hours contract?
The notice period for a zero-hours contract depends on the terms outlined in the contract between you and the employer. The contract sets out the agreed notice period, but there's also a legal minimum notice period required by employment law.
Here's the thing: the statutory notice period for zero hours contracts is usually around one week. However, depending on how long you've been working, it can be a bit shorter or longer. So, keep that in mind and do your research.
How much holiday pay do I get on a zero hour contract?
Holiday pay entitlement on a zero hours contract is calculated based on the hours worked or an average over a specific reference period.
Accrual of Holiday Entitlement:
Holiday entitlement accrues from the first day of employment. The statutory minimum annual leave in the UK is 28 days, which can include public holidays. If you are working irregular hours, this is usually calculated pro-rata.
Calculating Holiday Pay for Zero-Hours Contracts:
The calculation is straightforward if the hours and pay are consistent. For example, if you consistently work 20 hours per week, your holiday pay is based on those 20 hours. A reference period is typically used to calculate average hours if the hours vary. This reference period is usually the 52 weeks (one year) before the holiday. The calculation is based on the available weeks if you haven't worked for the full year.
Payment for Public Holidays:
If public holidays are included in the annual leave entitlement, you are entitled to your average pay for those days.
Statutory vs. Contractual Entitlement:
Employers must provide at least the statutory minimum holiday entitlement, but contracts may offer more generous terms.
Let's look at an example: If you worked varying hours over 52 weeks, your total earnings are divided by the total hours you have worked to get an average hourly rate. This rate is then used to calculate your holiday pay.
Employers should communicate how holiday pay is calculated to you to ensure transparency, and so you can plan well ahead and book that sunny escape with peace of mind!
Do I get sick pay if I’m on a zero hours contract?
Sick pay entitlement for zero hours contract workers can vary based on employment status, length of service, and contract terms.
Statutory Sick Pay (SSP) eligibility isn't based on weekly hours worked. However, you must meet criteria like earning a minimum amount and being unable to work due to illness for at least four consecutive days.
Some employers offer contractual sick pay, which may be more generous than SSP. The terms of contractual sick pay should be outlined in the employment contract or company policies.
Zero hours contracts provide flexibility, but the variability in hours worked can impact sick pay entitlement. SSP and contractual sick pay are often calculated based on average earnings, which can be challenging to determine with irregular working hours.
To verify your sick pay entitlement, you should refer to your employment contract, employee handbook, or company policies. If the terms are unclear, get some clarification from your employer or the HR department. I'm sure they will be happy to help!
The UK Government guides SSP eligibility and rates. You can refer to this for more information on statutory sick pay.
Employer’s responsibilities for zero hours workers
Like all workers, employers have specific responsibilities when it comes to those on zero hours contracts.
The general responsibilities employers typically have are:
Providing Written Terms: Employers must provide written terms and conditions of employment, including details about the zero hours arrangement. This includes pay, working hours, and other relevant requirements.
National Minimum Wage Compliance: Employers must ensure zero hours workers are paid at least the National Minimum Wage for all hours worked, including regular hours, overtime (if applicable), and additional payments.
Statutory Employment Rights: Zero hours workers have statutory employment rights, including protection from discrimination, health and safety rights, and fair treatment for part-time work, as in the Employment Rights Act 1996.
Holiday Entitlement: Zero hours workers can receive statutory annual leave and pay. Employers should calculate holiday entitlement based on the average hours worked.
Sick Pay Entitlement: Zero hours workers may be entitled to Statutory Sick Pay (SSP) if they meet the eligibility criteria. Some employers also offer contractual sick pay, which should be outlined in employment contracts or company policies.
Training and Development Opportunities: Employers should provide zero hours workers with the same opportunities for training and development as other employees. This helps ensure fairness and equality in the workplace.
Protection from Detriment: Zero hours workers are protected from being treated less favourably (detriment) for asserting their employment rights, such as asking for the National Minimum Wage or taking statutory leave.
Flexibility and Fair Treatment: Employers should use flexibility responsibly, ensuring that zero hours workers are treated fairly and not subjected to less favourable treatment than other workers.
Clear and transparent communication is essential. Employers should keep zero hours workers informed about available work, schedule changes, and relevant updates.
When should an employer use a zero hours contract?
Employers may use zero hours contracts in certain situations to meet their specific business needs.
In an industry or business with fluctuating demand, such as hospitality, retail, or events, they may use zero hours contracts to manage varying workloads. This allows them to have a pool of workers available when needed, which ensures the hours needed are covered. Often in these industries, businesses experience seasonal peaks or temporary increases in workload. These contracts can help them to bring in additional staff during those busy periods without the obligation of fixed hours.
If businesses need workers on a casual or on-call basis, where the need for labour is unpredictable, they might choose zero-hours contracts. These contracts provide flexibility for both you and the employer.
Of course, emergencies often arise in the world of business, and if they need to respond to these unexpected events, or last-minute requirements, zero-hours contracts offer the flexibility to call in workers as required and cover all bases.
Employers may also use a zero hours contract for a trial or probationary period when assessing a worker's suitability for a role, and then deciding to change the contract. This allows the employer and the worker to evaluate the working relationship before committing to fixed hours.
Finally, businesses involved in lots of research or project-based work where the duration and intensity of work varies, may also call upon zero hours contracts. Workers can be engaged as needed for these specific projects and time periods.
Over the last few years we have seen a rise in workers wanting more flexibility in their working arrangements and hours, and zero hours contracts can provide this. It allows people to choose when and how much they want to work, fitting around their family and life commitments, and often contributing to a good work-life balance.
Get help with zero hours contracts and employment law from Lawhive
If you are on a zero hours contract and you think your employer is not following the law, get a free case assessment from our team to determine your next steps. Our expert employment law solicitors work online for fixed fees, making access to legal help easy.