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Guest Blog | Are Zero Hours Contracts right for my business?

Written by Guest

Zero hour contracts have been received a lot of bad press recently with a very negative focus on zero hour contracts and their misuse by some employers. Guest Blogger Amanda Fielding dispels some myths in this article.

What is a zero hour contract?

It is a contract under which the employee is not guaranteed work and is paid only for the work they actually do.  The employee is usually expected to be available when the employer needs them, but they can refuse the offer of work.  Figures from the Office of National Statistics’ Labour Force Survey indicate that around 250,000 people (less than 1% of the workforce) were on a zero hour contract in 2012.  CIPD figures revealed that zero hour contracts are most commonly used in the hotel, catering & leisure industry (48%), education (35%), and healthcare (27%).

 What are the advantages of using zero hour contracts? 

  • Zero hour contracts allow greater flexibility for both the employer and the employee.
  • The employer saves money by not having workers sitting around being idle and being paid.
  • Employees can decide when and if they want to work.
  • Ideal for businesses whose work load changes from week to week.
  • Can build up a bank of employees to call upon for special events such as catering functions/banquets/holiday cover.

What are the disadvantages of using zero hour contracts?

  • The employer is not guaranteed that the employee will be available to work when they are required.
  • The employee may not feel part of the team as they are not there all the time.
  • The employee may struggle to get a regular income that covers their living expenses.
  • The employee may struggle to apply for loans etc as they do not have a regular income.
  • An employee who is on a zero hour contract is still entitled to statutory annual leave and the national minimum wage in the same way as a regular worker is.

Recent Changes

On the 26th May 2015, new regulations regarding zero hour contracts were bought in.

The law prevents employers from enforcing ‘exclusivity clauses’ in a zero hour contract.  An exclusivity clause would be where an employer restricts workers from working for another employer.  

About the Author

Amanda Fielding is a freelance HR Consultant with over 15 years corporate experience in Human Resources, recruitment, ER, policies & procedures and learning & development. Underpinned by this extensive background in HR, Amanda now supports small to medium size businesses with their people requirements through her business AJ HR Solutions.

Read more HR articles at her blog

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