Flexible and fair

If you use, or are considering using zero hours contracts, it is crucial to understand what they are, when they can and should be used, and what the implications are for employer and employee alike. As there is often confusion between zero hours employment contracts and casual worker agreements, this is how they differ:

An employment contract with a zero hours provision will offer employment status, with the consequential benefits, protection and rights.
A casual worker arrangement only confers ‘worker’ status, and offers very little in terms of benefits, protection and rights for the worker.

There seems little doubt that part of the reason for the current debate about exploitation using zero hours contracts is that some employers attempt to avoid their moral and legal responsibilities by drafting their zero hours contracts in the ‘casual worker’ style in order to avoid conferring employment status on the worker in question.

Where a worker is coming in regularly and is considered part of the organisation, then that is also an indicator of employment rather than casual worker status

In the event of a legal claim, an employment tribunal will make a decision about the worker’s employment status and rights on the basis of what is actually happening. If the relationship between the parties is one of employment, then the existence of a casual worker-type agreement will make no difference. One of the aspects a tribunal would look at when determining employment status in the context of a zero hours worker is whether there is mutuality of obligation. Is the employer obliged to offer work and is the employee obliged to accept it? Although many zero hours contracts carefully state that there is no mutuality of obligation, if in reality no one expects the worker to refuse an offer of work, then that is an indicator of employment.

Similarly, where a worker is coming in regularly and is considered part of the organisation, then that is also an indicator of employment rather than casual worker status. Where a worker will not be in work regularly, where there is literally no idea week to week whether there will be any work available, where the work is sporadic or seasonal, with no mutuality of obligation, then a casual worker agreement would probably be appropriate.

One of the key reasons often given by employers for wanting zero hours contracts is the flexibility they provide. However, it is still possible to achieve flexibility in the context of a proper employment contract, perhaps with a guaranteed minimum number of hours incorporated. If any kind of guaranteed minimum is not possible but the worker will inevitably be in work regularly, then it is still possible to put zero hours in the contract, with holiday and other benefits being calculated on the basis of actual hours worked.

Before going ahead with zero hours contracts, consider whether this is for the right reasons, and whether the work will genuinely be casual, or whether there is an element of trying to avoid responsibilities. As well as the risk that this may be challenged in an employment tribunal, morally it should not be up to the employee to claim their rights and a responsible employer will ensure that employees benefit from the appropriate protection they are entitled to, and place a worker on a contract or agreement which accurately reflects expectations and obligations on both sides.

As well as ensuring that your workers are placed on a fair and accurate contract type from the start, make sure you continually assess the situation to make sure that the agreements you have reflect what is actually happening. Something that starts as casual or very flexible often drifts into something more regular.

Flexibility is great but it works both ways, and by ensuring your contracts treat your workers fairly as well as achieving what you need, you should also benefit from a more productive and engaged workforce, as well as a reputation as a responsible and caring employer.

Eleanor Deem is Managing Director of face2faceHR.
www.face2facehr.com