What do zero hour contracts mean for workers?

Redmans Solicitors
October 4, 2012

The concept of “zero hour contracts” can be a confusing one for both businesses and workers. This post will therefore look at this concept and try to clarify what a zero hours contract is and what working under a zero hour contract means for workers. This will entail looking at the following issues:

What is a “zero hour contract”?
What benefits do zero hour contracts have for workers?
What disadvantages do zero hours contracts have for workers?
How do I know if I’m a casual worker or not?

What is a “zero hour contract”?

A zero hour contract is a contract which is used for casual workers. The purpose of a zero hours contract is to set out the terms of relationship and to allow the employer to engage the worker on an informal, flexible basis. This is what “zero hour” essentially means – the employer isn’t obliged to offer the worker work in any one week and will only offer work as and when it is available. One of the key stipulations of a zero hour contract is that the employer isn’t obliged to offer work to the worker and the worker isn’t obliged to accept any work given, hence its flexibility.

What benefits do zero hour contracts have for employees?

Zero hour contracts hold the following benefits for workers:

Flexibility
Informality

Flexibility

Zero hour contracts mean that the worker (i.e. you) isn’t obliged to accept any work that you’re offered by your employer. This is an advantage if you have other commitments than work such as a family or if you have another job.

Informality

If you have the status of “employee” (i.e. you have a contract “of” service rather than a contract “for” service) then you are required to work in a particular place, undertake particular duties, obey your employer, accept all work given and give personal service. These requirements are ‘loosened’ for more casual “workers” and there isn’t therefore the same degree of formality as is necessary with a contract of employment.

What disadvantages do zero hours contracts have for employees?

Relative lack of rights
Flexibility
Uncertainty

Relative lack of rights

“Workers” do not qualify for the following rights:

Protection against unfair dismissal
Statutory redundancy payments
Protection under the TUPE regulations

This can be a significant drawback for genuine workers – they lack certain rights that employees enjoy. If you’re unfairly dismissed, made redundant or the business you work for is transferred to new ownership then you will have little or no redress unless you can show that in fact you were an employee rather than a worker.

However, workers do qualify for protection under the Equality Act 2010 and protection against detriment for whistleblowing, among other things.

Flexibility

As above, flexibility can be a virtue. However, it can also be a disbenefit as there may be no regular pattern of working (indeed if there is then you may actually be an employee rather than a worker). Many workers prefer the certainty of a routine to this flexibility.

Uncertainty

As you’re not entitled to work certain hours or to certain legal rights your employment can be ended at any time that your employer deems fit. This, again, is a significant disbenefit for casual workers.

How do I know if I’m a casual worker or not?

You can determine whether you’re a casual worker or not from one of two things:

Your contract
The practicality and reality of a situation

Your contract, if you have such, should contain a specific statement as to your employment status. If not, you will be able to determine your employment status from the terms of the contract.

However, if you haven’t been provided with a contract or the nature of the contract doesn’t reflect the practicality of how you work then you should look at the reality of your working circumstances to determine whether you’re an employee or a worker.

Redmans Solicitors are London employment lawyers that have employment solicitors available in Hounslow. They offer employment law advice, compromise agreement advice and are unfair dismissal solicitors.