With the latest ONS figures estimating 910,000 people in the UK to be employed on zero hours contracts the use of these contracts is a hot topic for those industries becoming increasingly reliant upon them.
The hospitality industry in particular has embraced this new way of employing staff, with ONS figures last year showing that the ‘Accommodation and Food’ service industry employed the largest proportion (22%) of zero hours contract workers.
Why use them?
Zero hours contracts allow businesses to engage staff without an obligation to guarantee a minimum amount of work. For businesses with a fluctuating need for staff zero hours contracts can be a cost effective way to engage staff as and when needed to meet seasonal and other demands.
Zero hours contracts have had a bad press. Back in 2013 they became the subject of a media storm with the press proclaiming that they exploited workers and removed job security. Employers in the hospitality sector were the target of much criticism, with reports of zero hours workers being denied basic employment rights, such as holiday pay and national minimum wage, being given little or no notice of cancelled shifts or being required to make themselves available for work even during periods when the employer had no work to offer (so-called exclusivity requirements).
In the lead up to the 2015 general election zero hours contracts became a political hot potato, with all three main political parties making reference to zero hours contracts in their election manifesto. The main focus was on exclusivity clauses. The coalition government drafted legislation to make exclusivity clauses in zero hours contracts void, which was then brought into force by the Conservative government in May 2015. Not long afterwards, further legislation was enacted to give ‘teeth’ to the legislation, so that zero hours workers who are dismissed or suffer detrimental treatment as a result of breaching exclusivity requirements can now bring a claim in the Employment Tribunal.
Despite these changes to the law to protect workers, the use of zero hours contracts continues to be a contentious issue. Nevertheless, they remain a popular way to engage staff. There have been several recent reports of large restaurant, fast food chains and retailers offering their zero hours staff the option to move on to permanent employment contracts with a minimum number of guaranteed hours each week. Interestingly, a large proportion of staff have opted to remain on zero hours arrangements, demonstrating that many working under zero hours arrangements appreciate the flexibility they allow.
If you engage staff on a zero hours basis, or are considering doing so, there are some factors to consider in order to reduce the risk of becoming the subject of negative media attention:
• Be clear and transparent about the rights and obligations of zero hours worker in a written contract. The terms of their engagement should make it clear what their employment status is (most likely employee or worker) and their entitlement to certain key rights, such as holiday pay and sick pay.
• Be careful not to discriminate against zero hours workers who turn down work offered. Much of the media focus has been on the pressure on some workers to accept work offered for fear that their employer will stop offering work if they turn shifts down. This is a form of exclusivity, even if the contract does not explicitly prevent a worker from working elsewhere.
• Regularly assess your use of zero hours contracts and consider whether in some cases it would be more appropriate to offer workers alternative arrangements, such as fixed-term, part time or permanent contracts.