A zero-hour contract is a contract of employment used in the United Kingdom. Such contracts meet the requirements of the Employment Rights Act 1996 by providing a written statement of the terms and conditions of employment, their provisions often create an ‘on call’ arrangement between employer and employee. There is no obligation upon the employer to provide work for the employee, or for the employee to accept the work offered. The employee agrees to be available for work as and when required, so that no particular number of hours or times of work are specified. The employee is expected to be on call and receives compensation only for hours worked.
It's important to be aware of the provisions of the National Minimum Wage Regulations, which state that workers on 'stand-by time', 'on-call time' and 'downtime' must still be paid the National Minimum Wage if they are at their place of work and required to be there. Similarly, such time is likely to count as 'working time' under the Working Time Regulations if the worker is required to be on-call at the place of work. This means that it's unlawful to ask employees to 'clock off' during quiet periods but still remain on the premises. An employer is not obliged to offer sick leave or holiday pay, though a court may decide that consistent employment over a period of time may override these terms and create additional legal rights.
In some industries, workers on zero-hours contracts will agree to work according to weekly or monthly rotas. In other sectors, e.g. retail, workers may be called and told to come to work at a few hours' notice.
Zero-hours contracts may suit some people who want occasional earnings and are able to be entirely flexible about when they work. It's important to be aware of your responsibilities as an employer and to set out the terms of any contract clearly if you are taking on people on a zero-hours basis.
If you would like to speak to one of our specialists about employment advice, please do not hesitate to contact a member of our team.