Zero hours contracts
Zero hours contracts are increasingly popular and the number of individuals engaged on such contracts is continuing to rise each year.It is important that both individuals (workers and employees) and employers understand the rights afforded to people engaged on these contracts.
In this section you will find FAQs and all of the REC materials for zero hours contracts in one place, including: model contracts, additional documents, legal bulletin articles and external government guidance.
- See also 'Zero hours contracts: guidance for employers' (Gov.uk)
What is a zero hours contract?
A zero hours contract, often described as a casual work contract, is a contract between an employer and an individual, where:
- the employer is not obliged to provide any minimum working hours; and
- the individual is not obliged to accept any work offered.
Those working under a zero hours contract will usually only be paid depending on house many hours they work and generally only be asked to work when they are needed, often at short notice.
What are exclusivity clauses?
An exclusivity clause is a clause in a zero hours contract that prohibits the individual from working under another contract, or that requires the individual to get the employer's consent prior to working under another contract.
Zero hours contracts - Can I use exclusivity clauses in zero hours contracts?
The Small Business, Enterprise and Employment Act 2015 introduced a new provision which effectively bans the use of exclusivity clauses in zero hours contracts. With effect from 26 May 2015, regulations about zero hours contracts were brought in.
It will now be an automatic unfair dismissal if someone is dismissed where they have breached a contractual clause in their zero hours contract which stopped them from working for another employer. It will also be unlawful for a worker to suffer any detriment as a result of working for another employer, other than the one they have the zero hours contract with.
Is there a time limit to bring a claim for unfair dismissal if a worker breaches an exclusivity clause?
There is no qualifying period for individuals to bring an unfair dismissal claim for the reasons stated above in 'Can I use exclusivity clauses in zero hours contracts?'.
Claims made to an employment tribunal (ET) will ultimately depend on the ET finding an exclusivity clause in the zero hours contract in question.
Are zero hours contracts for workers or employees?
A zero hours contract does not have mutuality of obligation - i.e. there is no certainty that work is available. Therefore, this generally mean that under the strict definition of a zero hours contract, the individual will have 'worker' status for the purpose of employment protection.
However, the reality of the circumstances may mean that the individual does in fact have 'employee' status. For example, the employer may choose to provide a certain amount of work for the individual on a non-contractual basis. Zero hours contracts are therefore suitable for use by both workers and employees. To ascertain the position, an employment tribunal will have to assess all of the terms in the contract together with what has actually happened in practice between the parties to see whether the individual is a worker or an employee.
What rights to individuals enjoy, in terms of pay, under a zero hours contract?
All individuals under a zero hours contract are entitled to be paid the national minimum wage, whether they have employee or worker status. In general, they will be paid by reference to the number of hours actually workers rather than by an hourly rate.
See the national minimum wage section on the Legal guide and the national minimum wage / national living wage table for more information.
Disclaimer
This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full terms and conditions on our website.