Jan 28, 2023

What Are the Key Clauses in a Zero Hour Employment Contract?

A zero hour contract, also known as a casual worker contract, allows a company to hire employees


What Is a Zero Hour Contract?

A zero hour contract, also known as a casual worker contract, is a type of contract that allows a company to hire employees on a need-to basis. Zero hour contracts are not normally used for the core operations of the business. Instead, employers use zero hours contracts when there is an irregular demand for work such as seasonal work. They feature heavily in the gig economy. Approximately 1.3 million people in the UK are on zero hours contracts.

Zero hours contracts allow employees to work around other commitments such as studies or caring responsibilities and are more flexible than traditional employment contracts. For example, employers are under no obligation to offer zero hours workers any minimum set contracted hours and employees are not obliged to accept work. Also, under UK law, zero hours contracts cannot prohibit employees from working for more than one employer.

It is important to have a clear zero hour contract between the employer and the employee to preserve the rights of both parties. This article will set out 4 key clauses to include in a zero hour contract.

1. Offer of work

Under a zero hour contract, the employer engages the employee when there is need for their services. Therefore, a zero hour contract should include an offer of work clause that sets out the procedure by which the employer will offer each engagement to the employee.

The clause could also state that the employee is under no obligation to accept the offer. This serves to maximise flexibility and grants both parties control over the work that is proposed. Finally, the clause should also include the general nature of the work that the employee would be engaged to do.

2. Accepted engagement

Since the employee has the right to accept or decline the offer of work from the employer, the contract should regulate the employer’s expectations after the employee accepts the engagement.

The accepted engagement clause should set out the employer’s expectations such as the performance criteria for the job which the employee is engaged for. It could also specify how partial performance, whether due to the suspension or cancellation of the engagement by either party, is to be treated. Normally, the employee would be paid according to the hours they worked up to the point of suspension or cancellation.

3. Pay

Another clause that should be included in a zero hour contract is the pay or salary clause. Under a zero hour contract, an employee is entitled to at least the national minimum wage for the hours that they have worked. Accordingly, the pay clause should include the hourly rate at which the employee would be remunerated. The pay clause should also include the date, frequency and method of payment. Finally, the pay clause should reserve the right to deduct any sums owed by the employee to the company from their wages. The employer should make sure that where deductions are made, the employee's pay does not dip below the national minimum wage.

4. Holiday

Finally, like permanent employees, zero hours workers are entitled to paid holiday. Holiday entitlement could be prorated based on the number of hours worked and the annual entitlement. Therefore, a holiday clause in a zero hours contract could set out the annual entitlement for the employee and how the prorated entitlement would accrue. Additionally, the clause could set out the process for applying for a holiday and how accrued but untaken holidays would be treated.

The Bottom Line

In conclusion, a zero hour contract is a special type of employment contract. It does not contain all the obligations and restrictions that feature in a regular contract of employment. Consequently, due to the special nature of the contract, it should include special clauses such as accepted engagement and offer of work clauses. It may also include other clauses such as a no presumption of continuity clause, which may impose a break in employment for a full calendar week in order to maintain the agreement's status as a zero hour employment contract.

The opinions on this page are for general information purposes only and do not constitute legal or financial advice on which you should rely.

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