Zero hours have received a lot of bad press in the past few months with the media reporting on the likes of smiley and sad faces being used to communicate whether an individual was required to work. Interestingly, zero hour or casual contracts have been knocking around for a long while; my very first job was on that basis and, as it was before the prevalence of mobile phones, the age old drawing of straws was used instead.
The issue of zero hour contracts features regularly in questions from our business clients; particularly seasonal businesses. When speaking with small business owner Judith* recently, she raised the topic of the feasibility of using a zero hour contract. After chatting with her it became apparent that what she needed was flexibility with her staff’s working availability. Her business was such that she had discernible busy and quiet times of the year, but her trade attracted casual employees – primarily students – who left as the season quietened. Because of this, her staffing levels were just about right and, as it had never been her practice or intention to have her staff work either no hours, or very minimal hours a week, we advised her on a more appropriate approach.
This is not an uncommon query from SME’s, maybe because there was no legal definition of a ‘zero-hour’s contract’ and it has been used interchangeably with ‘casual contracts’. On the 26th May 2015 the Government implemented certain provisions of The Small Business, Enterprise and Employment Act 2015, which now defines a zero hours contract as a contract of employment or other workers’ contract where any agreement to perform work or service is conditional upon the employer making it available and where there is no certainty that work will be offered. The government has also banned clauses in these agreements which would prevent an individual from working elsewhere whilst waiting for the offer of work – the much touted ‘exclusivity clause’.
As with all new pieces of legislation, its impact is still to be seen, but it still does not address one of the main causes for concern; that being the uncertainty of any employment and whether the offer will be for sufficient hours to live off and it also holds complications for employers such as the calculation of holiday pay.
Zero-hours contracts clearly have a place in society, but as my colleague has previously blogged they also have their limits.
*name has been changed