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Employers – are you compliant when it comes to zero-hours contracts?

These regulations dictate how an employer may be liable for unfair dismissal

A zero-hours contract means that you are not obliged to provide minimum working hours and the employee is not obliged to accept the work offered to them.

Most employers offering zero-hours contracts will be familiar with this and will employ workers on this basis if they need to recruit a flexible workforce for a business that has a temporary or unpredictable need for staff.

Examples of when zero-hours workers are needed are:

  1. When a restaurant or hotel has an unexpected or last-minute event.
  2. When a company has temporary staff shortages.
  3. To provide on-call work, such as a company providing care workers.

It is important to also be aware of the Zero Hours Contracts (Redress) Regulations, which were introduced in 2015. These regulations dictate how an employer may be liable for unfair dismissal.

The regulations give zero-hours workers the following rights:

  1. The individual will usually have ‘worker’ employment status.
  2. Whilst the worker may have breaks in their contracts that affect accrued rights, zero-hours workers have the same employment rights as other workers
  3. The zero-hours worker is entitled to receive the national minimum wage and national living wage.
  4. Zero-hours workers are entitled to annual leave, which accrues over the first year but can thereafter be taken before it accrues.
  5. When the employment comes to an end, the employer must pay the worker for any accrued or untaken holiday pay.

In addition, the regulations prevent employers enforcing an exclusivity clause in a zero-hours contract, which would mean that workers could not work for other employers. Such a term would be considered automatically unfair if they were dismissed because they had breached the clause.

The regulations also say that it is unlawful for a worker to be at a disadvantage because they work for another employer. This would cover situations in which a zero-hours worker was overlooked for work on the basis that they were also working for another employer. Workers are entitled to bring such claims as soon as the zero-hours contract is agreed.

Employers need to ensure that they really need workers on a zero-hours contract. It may be more efficient or appropriate, in some cases, for the employer to take on agency workers or to employ staff on fixed-term or even permanent contracts. This needs to be balanced against the cost of agency fees.

It is also important for employers to ensure that a worker employed on a zero-hours contract is performing such a contract. If the worker is working continuously, they could be considered an employee and be entitled to additional associated employment rights, such as maternity pay and the right to request flexible working.

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