Ten Top Tips For Zero Hours Contracts

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Zero hours contracts have been in the news stirring up a controversy in recent months due to misuse by some rogue employers so much so that the Vince Cable will be looking at them very closely.  A consultation process has been launched https://www.gov.uk/government/consultations/zero-hours-employment-contracts.  Zero hours contracts have been in place for many years without much trouble, but since the recession they have been used increasingly creating job uncertainty for many and low pay conditions. They are ideal for students and individuals who are only seeking occasional work, but not ideal for individuals with heavy financial responsibilities such as a mortgage.  Zero hours contracts do have many benefits for employers allowing a flexible workforce that can grow or diminish according to workload demands.  Here we list ten top tips for zero hours contracts.

1. Use zero hours contracts reasonably.  They are ideal to flex your workforce when workloads have peaks and troughs and there is not a constant need for certain members of staff.  Having a pool of workers to call upon is ideal.   Any who regularly refuse work should be removed from the company’s books.

2. Zero hours contracts should not be given to staff who you use on a very regular basis otherwise the staff could claim enhanced employment rights.  Pulling different employees from the pool is best so that the working arrangement is very ad hoc.  Employees who are used regularly might be best suited on a fixed term, annualised hours or part time contract.

3. If you decide at the last minute you don’t need to call an employee on a zero hours contract into work, if you have already pre-arranged that they will work you should pay them.  The CIPD recommend as a minimum paying their travel expenses and one hours pay as compensation.

4. Ensure you provide staff on zero hours contracts with written employment terms and conditions which is required by the Employment Rights Act 1996.  The terms and conditions should be reviewed on an annual basis to ensure that the zero hours contract still reflects the actual working relationship.

5. Do not impose any restriction on staff with zero hours contracts so that they are free to work for other employers.  Therefore remove any exclusivity clauses.in employment terms and conditions. Zero hours staff should also not be on call without pay or the offer of work.

6. Consider providing comparable rates of pay to staff on zero hours contracts with those on other types of contract.  Whilst this is not essential there is an outside change you might have to justify any wage disparity should this be challenged in an employment tribunal.

7. Ensure staff on zero hours contracts are aware of your company’s employee handbook and HR policies and that they know they should comply with them.

8. Train your line managers in the operation of zero hours contracts to ensure they are managing zero hours staff in accordance with employment law and shifts are issued appropriately.

9.  Keep careful records of zero hours staff working hours to ensure they receive the correct amount of accrued holiday pay.  Holiday pay can be paid on a quarterly basis.  If rolled up holiday pay is used instead it must be clearly shown in the employment terms and conditions (how it is calculated) and in wage slips.

10. Manage the working hours of zero hours staff well by distributing work.  Zero hours staff are not entitled to SSP or maternity pay if they are only allowed to work on an ad hoc basis.  It is therefore lawful that they do  not accrue these employment rights on a correctly used zero hours contract.