The Future of Zero Hours Contracts
An increased desire for flexibility in the workplace has led to a rise in the number of people employed on zero hours contracts in the last year (12.5%, according to the Office for National Statistics).
A “zero-hours” contract is a contract between an employer and a worker where the employer is not obliged to provide any minimum working hours and the worker is not obliged to accept any work offered. They are commonly used by retailers, restaurants, leisure companies and hotels. Such contracts have been criticised for failing to provide any financial certainty to workers, however supporters argue that they offer flexibility for both workers who can fit hours around other commitments and employers who own businesses whose needs can be varied and unpredictable.
Although in theory the element of flexibility can be attractive to employers and workers alike, in practice it is unlikely that a worker on a zero hours contract will refuse work for fear that they will not be asked again. Therefore workers may find it difficult to make any plans in case they receive a last minute request to work. Further the majority of zero hours contracts will give staff “worker” rather than “employee” employment status meaning they have fewer rights.
For employers who need staff to assist as and when a need arises they appear to be an ideal solution. However employers still need to be cautious when entering into such contracts and assess whether they are more beneficial to the business than fixed term contracts or using agency workers. Workers on zero hours contracts can still accumulate certain rights over time and in the event of a dispute the contract will be scrutinised by a tribunal who will decide what contractual relationship exists having regard to how the working relationship has developed. For example, if a worker has been subject to a disciplinary procedure their status may be considered to be that of an employee.
Despite seemingly rapid growth in this area there are also suggestions that in the wake of Brexit, firms are going to find it more difficult to fill roles without guaranteeing hours of work if the supply of labour from the EU becomes limited. Given the imminent trigger of Article 50 on March 29th this issue will be at the forefront of the minds of those employers whose ability to rely upon zero hours contract workers is fundamental to their business.