Business aid: Zero hours contracts
Samantha Dickinson of local solicitors Dean Wilson LLP answers questions on employment law. This week: zero hours contracts
Q. I’ve heard a lot in the news recently about Zero Hours Contracts but I don’t really understand what they are and why they are so bad. Could you give me some advice?
A. A Zero Hours Contract is a contract for casual working where a company doesn’t guarantee to provide an individual with any work and only pays them for the work they actually do. An individual is expected to be available for work as and when called upon by the company. Individuals engaged under a Zero Hours Contract are usually not employees but are classed as workers, which means not only do they have no guaranteed hours of work but they have fewer employment rights. For example, workers are not entitled to maternity leave and pay and in many cases workers under Zero Hours Contracts are not entitled to sick pay either.
As you’ve heard recently, Zero Hours Contracts are popular in the retail and hospitality industries, with companies from Sports Direct to Buckingham Palace using them for part time or seasonal staff.
The reason why these types of contracts have been criticised is mainly because of the uncertainty workers engaged on them suffer. With no guarantee of work and so no guarantee of pay it can be difficult for individuals to live their lives.
Q. Are they likely to become unlawful then?
A. In my opinion, I don’t think they will be made unlawful because Zero Hours Contracts do suit some– for example students – but Deputy Prime Minister Nick Clegg has recently stated that a review is being undertaken into the impact of Zero Hours Contracts and it is possible that some legislation might come into force thereafter. That said, the Government do seem intent upon reducing red tape for companies and stripping away individual employment rights, so restricting the use of Zero Hours Contracts would seem to run contrary to that general theme.
I would say that there is a large amount of reputable research that demonstrates engaging staff with the company they work for and treating them well means they are more likely to be dedicated to the business and so will work better and harder. These contracts do suit some industries and some individuals so my personal view is that they should be looked at on a case-by-case basis.
