Use of zero-hour contracts increases

As the government continues to find ways to tackle the UK’s unemployment issues, it has been reported that employers have been finding increasing benefits by using zero-hour contracts for their employees.

Vince Cable, the business secretary, has been leading a review since the summer into this practice, which allows employers to hire staff with no guarantee of work.

Zero-hour contracts mean that employees only work as and when they are needed by their employers, sometimes at short notice, and are only paid for the hours they work.

Some zero-hours contracts oblige workers to take the shifts they are offered, others do not. Sick pay is often not included, though holiday pay should be, in line with working time regulations.

Research conducted recently by the Recruitment and Employment Confederation of 600 employers found that more than one in four firms now employs a member of staff on a zero-hours contract.

For employers, zero-hours contracts can provide ultimate labour flexibility whilst allowing them to keep labour costs down by matching staffing levels to demand as closely as possible.

There is currently an ongoing test case concerning the issue of whether staff on zero-hours contracts may be deemed to be part-time employees and therefore entitled to the same benefits as full-time employees such as sick pay, holiday pay and, where relevant, bonuses (Sports Direct v Gabriel-Abraham). Employers using zero-hours contracts are advised to pay close attention to the forthcoming decision in this case.

At Royds, our experts can advise on all areas of employment law, including preparing zero-hours contracts and other forms of employment contracts. For more information, please contact Richard Woodman or Gemma Ospedale.