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What’s so bad about Zero-hours contracts?

October 24, 2013 - In Employment Law, HR News

Zero-hours contracts with more flexible working hours can benefit both employers and employees alike –  understand more about the benefits and the risks.


The majority of businesses cannot afford to have full time permanent staff who are not fully utilised. These contracts have been successfully used in the working world for many years in order to accommodate peaks and troughs within an industry, and to create a team of casual staff familiar with the business.
In peak times, staff can be called upon who are already trained, understand the business and can hit the ground running ensuring productivity is optimised, though with the controversy surrounding zero hours contracts recently it would be easy to believe that they are the worst thing for workers since the employment laws of a couple of centuries ago!
A zero-hour contract is a contract of employment which while meeting the terms of the Employment Rights Act 1996 by providing a written statement of the terms and conditions of employment, contains provisions which create an ‘on call’ arrangement between employer and employee. It does not oblige the employer to provide work for the employee, nor does it oblige the employee to accept the work offered.


It may be that individuals either no longer need or want permanent full time employment and are happy to work on an ad hoc basis, or need to work around domestic arrangements. The flexibility these contracts offer cannot be denied.


So how common are zero hours contracts?


According to a recent article in The Financial Times  more than a quarter of companies employ someone on a zero-hours contract, potentially involving up to a million workers – a much higher figure than previously thought.


These contracts are said by some to be exploitative and of benefit only to employers, that workers on these contracts on average earn less per hour than their full contract wielding peers. This is not the norm.


In today’s economic climate, it’s not always viable to employ all staff on contracts with set hours and as long as the systems used to manage workers on such contracts are well run, they can provide a good solution for all.


Used by NHS Trusts, the hospitality and tourism industries among others, zero hour contracts also offer the employee a great degree of flexibility. Contracted staff can benefit from holiday and sick pay, pro rated and importantly, they legally have the right to say no to any offer of work.


For those employers currently using zero-hours contracts, it would be wise to:


  • Ensure that the terms and conditions are communicated clearly at the outset so employees understand their rights and what is expected of them
  • Ensure good management of staffing arrangements so that shifts are rotated appropriately
  • Be clear about the differences between ‘zero-hours’ contracts and the employee benefits and employment rights they bring, and ‘casual’ working arrangements to avoid getting embroiled in potential employment-related disputes.


If you are looking at a way to structure more flexible staff contracts for your business and would like some professional advice on the best contracts to put in place St Klare Reece can help you.


We’re experts at providing outsourced creative HR solutions for SMEs.  We work with you to implement contracts for your staff that suit them and your business – a win/win for both parties!


For a complimentary informal discussion contact Denise Reece on 01327 264540, or email

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