Zero Hours Contracts Explained

Zero Hours Contracts Explained

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There has been much discussion in recent times about the use and legal issues of zero hours contracts.

There has been much in the press over the past 12 months about zero hours contracts, and much discussion by political parties about their use and legal issues. This has certainly been a grey area and we wanted to use this post to outline the main issues.

What is a Zero hours contract?
Zero hours contract is not a legal term. In the absence of a legal definition, the Chartered Institute of Personnel and Development (CIPD) defines it as “an agreement between two parties that one may be asked to perform work for another but there is no minimum set contracted hours”. The contract will state what pay the individual will receive if they do work and will deal with circumstances in which work may be offered and possibly turned down.

The exact nature of zero hours contracts may differ from organisation to organisation. For example:

  • Individuals on zero hours contracts may be engaged as employees or workers.
  • In some contracts the individual will be obliged to accept work if offered, but in others they will not.
  • The pay arrangements and benefits provided may differ from those provided to people doing the same job with a contract offering guaranteed hours.

Because ‘zero hours contract’ does not have a specific meaning in law, it is important for employers to ensure that written contracts contain provisions setting out the status, rights and obligations of their zero hours staff.

Any organisation considering using zero hours contracts should think carefully about the business rationale for doing this, including whether there are other types of flexible working or employment practices that would deliver the same benefits.

These types of working arrangements are most suited to situations where work fluctuates unexpectedly and where consequently the employer cannot always guarantee work.

On 26 May 2015, new regulations about zero hours contracts were brought in. The law prevents employers from enforcing ‘exclusivity clauses’ in these contracts (whereby an employer restricts workers from working for other employers).

The CIPD has undertaken research into zero hours contracts and sought feedback from employees and employers. Research finds that those employed on zero hours contracts value the flexibility they offer, are more likely to say they have the right work-life balance and are less likely to feel under excessive pressure at work on a frequent basis.

If Human Resource is a subject that interests you either personally or professionally, you might like to take a look at the courses we offer at NCC Home Learning.

We offer both level 3 and level 4 Human Resource diplomas, along with a range of other Human Resource courses.

Nick Cooper
Nick is NCC's resident blog author and covers a range of subjects, including teaching and health & social care. NCC is an international learning provider with over 20 years’ experience offering learning solutions. To date, NCC has engaged with over 20,000 employers, and delivered quality training to over half a million learners.
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