A zero-hour contract is a legal term between the employer and the employee. It denotes a contract where the employer does not have to provide any minimum working hours. For example, a self-employed plumber might take on work offered on a zero-hour basis from some of his regular clients. But he remains self-employed. Here’s what you should know about this kind of contract if running a small business.

What Is A Zero-Hour Contract?

A zero-hour contract is a professional contract that doesn’t assure employees of minimum working hours. This means they do not have any assured working period and cannot complain about working long hours. However, this also means that they are not bound to take on any work they are asked to do.

At least 2.3% of the workforce in the UK are on zero-hour employment contracts, as these contracts are also for seasonal staff. This kind of contract is mainly common in the UK the US, and the number mostly increases around Christmas and mid-summer.

The employees under zero-hour contracts can accept or turn down the work as per their choices. On the other hand, some other contracts bind workers to do the work assigned to that employee.

Types Of Zero-Hour Contract Jobs

Zero-hours contracts are best when a business needs extra hands to complete work. For instance, businesses that experience a temporary staffing shortage could use this. This is very similar to small business owners hiring supplementary staff to help with the holiday rush at a shop. For example, if a part-time teacher takes class when the subject teacher is on leave, it can be called a zero-hour arrangement. In short, the zero-hour contract is a part-time job by nature.

There are a few types of zero-hour contracts. Many employers pay extra to their permanent employees when they work overtime to meet temporary requirements. If there is a new change in a business, the business can recruit a part-time or fixed-term contract worker. When there is a seasonal peak in demand in a business, the business can also hire employees by offering annual hours contracts. A business can hire staff through an agency if the business needs temporary staff or last-minute work requirements.

Zero-Hour Contract – Rights Of Employees

A zero-hour contract offers no guaranteed working hours, no sick pay, parental leave, notice period, or pension. So, it is important to have a termination clause. The terms and conditions should be clear in the contract to terminate the employee. The zero-hour contract also comes under many employment laws. The laws specify that the workers under this contract should also have the right to protect themselves from unfair dismissal.

A worker’s duties and responsibilities put a worker in a position where the person should be aware of confidential information or trade secrets. It is very important to have proper confidentiality and non-disclosure clauses. These may include both the parties’ rights and obligations, penalty conditions, etc. Many states in the US have ruled that non-compete clauses are unenforceable. There is a ban by the Small Business, Enterprise, and Employment Act 2015 on exclusivity clauses that bar a worker from working for any other firm in the UK.

Zero-Hour Contract – Advantages And Risks You Should Take Into Consideration

The advantages of a zero-hour contract are that the contract allows businesses to meet high demand during specific events or on seasonal business. The flexibility of these contracts is tempting to a certain section of workers who do not want a full-time working schedule.

Zero-hours contracts reduce the risk of hiring staff whose skills may end up with time, which can seriously affect the growth of a new business. Also, employers do not have to provide additional benefits to these contract-bound workers.

If you are a business owner, you may get inexperienced workers who may get experienced while working for your company, and sooner or later, that employee can work as a permanent worker in your company.

Zero-hour contracts meet the demands of the new-age business owners. This contract is not always a long-term contract, so it is important to get the right match. But it is also vital that the employers understand how to compensate the contractual workers.

We hope you found this blog useful. Don’t forget to share your thoughts in the comments section!