Business

What you need to know about zero-hours contracts ahead of Christmas

Zero-hour contracts are used by employers where staff are engaged when required or where individuals choose to work.
Zero-hour contracts are used by employers where staff are engaged when required or where individuals choose to work. Zero-hour contracts are used by employers where staff are engaged when required or where individuals choose to work.

THE busy festive period often leads to an increase in the number of businesses employing seasonal staff on zero-hour contracts.

Zero-hour contracts are an employment arrangement where work is not guaranteed by a business but instead staff are engaged when required or where individuals choose to work.

The framework of zero-hour contracts differs from business to business and this can affect an individual's employment status and what employment rights they are entitled to.

The key distinction for employers is whether their staff are legally considered ‘employees’ or whether they are classed as ‘workers’.

A staff member on a zero-hour contract is more likely to be considered an ‘employee’ if they undertake regular work over a prolonged period, they are required to do a minimum number of hours weekly, or a person who can only work for your business.

Employees are entitled to extra employment rights such as statutory maternity pay and leave, minimum notice periods that their employment will cease, time off for emergencies and protection against unfair dismissal.

A person is generally considered a ‘worker’ if their working arrangements are more impromptu, such as situations where a business offers an individual work, but the person has little obligation to accept, suffering no consequences for refusal to work, but receiving no payment if work is not performed.

The lack of guaranteed hours for workers means they receive fewer employment rights than employees, however they are still entitled to key legal rights, such as the national minimum wage, rest breaks, paid holidays and the right to be protected from discrimination.

With fewer rights afforded to ‘workers’ some businesses prefer to use contracts that grant staff solely ‘worker’ status.

However, an incorrectly issued contract can open a business up to employment action against them either through the courts or tribunals.

Courts and tribunals take a pragmatic approach, looking outside of contractual terms, instead considering a myriad of factors when analysing an individual’s employment status.

This process can be extremely costly for a business and can take a significant amount of time to complete, thus it is vital for employers to adopt appropriate safeguards when hiring staff and when drafting contracts to avoid industrial action against them.

The first and most important way employers can do this is to ensure that contracts are clear and comprehensive, with careful consideration given as to whether a staff member is an employee or a worker.

Contracts should therefore include an individual’s statutory employment rights, should explain how work will be offered and also explain whether the individual is permitted to reject or accept work as they wish.

Employers should also include how a staff member’s contract can be terminated, for example at the end a piece of work or alternatively through notice given by either party.

It is also vital that employers put in place detailed and rigorous working policies to avoid tribunal action, for example, through a carefully drafted code of conduct and anti-discrimination policies prepared by a human resources manager who also ensures that meetings, casual or otherwise, are clearly documented so as to be available if needed for future reference.

Finally, if in doubt when drafting contractual terms, or before proceedings are taken, it is important to seek legal advice so you can be sure of your rights and responsibilities, resolving any issues and protecting your business in the future.

Jenna Doherty is a Solicitor at McKees (www.mckees-law.com), specialising in employment and licensing law.