Zero Hours Contract
Also known as casual contracts, zero hours contract refers to a contract whereby an employer hires a worker, without any guarantee of work. Although this type of contract has been opposed by some industry players like workers’ unions, it continues to operate in various sectors, making it an important point of focus in business, legal studies among other fields. In the UK alone, zero hours contracts are on the rise and applied in several companies, including retailers Sports Direct, JS Wetherspoon, Cineworld, just to mention a few.
The UK government introduced new regulations for zero working hours on May 26th 2015. The regulations are meant to hinder employers from imposing ‘’exclusivity clauses’’ in zero working hours contracts.
An exclusivity clause is a situation whereby an employer prevents other workers from working for other employers.
Basic Elements of Zero Hours Contract
Although zero hours contract does not guarantee work, there are certain key terms of the agreement that must be included. The following are the key elements of a casual contract.
- There is no obligation for the employer to give work to the employee, or the latter to accept any given assignment.
- Workers hired on zero hour basis have similar rights to regular employees, however, they may have breaks in their job agreements, which have an impact on the accrued rights.
- Individuals employed on zero hours are entitled to the Minimum Wage set by the recognized national authorities, annual leave and also pay for travel expenses as other regular employees.
It should also be noted that in zero hours work agreements, the employer is not under obligation to give any minimum working hours to the worker. The worker can either decide to take the job or turn down.
The law allows potential workers to ignore a clause in their contract if it denies them the opportunity of seeking work elsewhere, and accepting work from another employer. However, the employer still takes responsibility for the health and safety of workers.
Instances when zero hours contracts can be applied
Considering the flexibility of zero working hour’s contracts, they can be used in several occasions. Hiring workers on this basis is an ideal option for companies with temporary or changing needs of workforce. This gives workers freedom to seek jobs elsewhere whenever their employers do not have work.
The following are other instances when zero hours contracts can be applied:
- Last minute or unexpected events for example, restaurants in need of additional staff to cater for parties or large influx of customers.
- Temporary shortage of workers, for instance, when a company is experiencing difficulties and need an expert for a period of time until it gains track.
- On-call jobs like in banking institutions, which often hire staff to handle care services for a duration of time.
Controversial Issues about Zero Hours Contracts
Despite the growing popularity of zero hour’s employment, there are some issues that have been raised by many workers and unions. Some argue that these contracts;
- Do not offer financial security and stability
- Often fail to provide sufficient working hours for the employees who may need more time
- May provide a loophole for employers to favor some workers over others, which amounts to misuse of management tools.
How the use of Zero Hours Contract has developed
In January 2015, the Office for National Statistics reported that businesses used 1.5 million zero-hours contracts to hire workers. This represents an increase of about 100, 000 people from last years.’ This, the ONS said can be due to the argument by many that although the contracts do not guarantee minimum working hours, they provide flexibility in job patterns.
Further, it is estimated that about 2.4% or 744,000 people, of those employed between April and June 2015 were hired on zero hour’s basis. This also increased from 624,000 or 2% over the same period compared to the previous year.
Among the population of people in zero hours contracts, women have the highest number of about 54%, comprising those in full-time education or younger age groups.
Although zero hours contract is gaining traction across many sectors, authorities have warned that employees and employers should be careful to ensure that the governing laws are upheld.
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References
http://www.acas.org.uk/zerohours
https://www.gov.uk/contract-types-and-employer-responsibilities/zero-hour-contracts
http://www.bbc.com/news/business-34125544
http://www.bbc.com/news/business-23573442