With all this press coverage over recent years, you might be feeling uneasy about using these contracts in your business. We take a look at the pros and cons of zero hours contracts to help you make an informed decision about using them.
We also share some tips on using them correctly and successfully, and suggest some alternative options if zero hours contracts aren’t quite the right fit for you. ‘ Zero hours contract’ is not a set legal term and there’s no universally accepted model.
• Flexibility: If the workload for your business fluctuates, you might need more staff during certain seasons or to cover events. • Growth: If you’re a new business, or experimenting in new market areas, you may be unsure what the volume of work will look like.
People classed as ‘workers’ rather than ‘employees’ have a more straight-forward financial relationship with their employer and are not entitled to additional rights such as maternity pay, statutory minimum notice periods and redundancy payments. • Foot in the door / Keeping a hand in: Zero hours contracts are a good way for inexperienced workers to gain useful grounding in a new industry, and may lead to permanent contracts and more reliable employment.
Several companies have been called out for placing unreasonable demands on zero hours workers’ availability at short notice. • Unpredictability for the worker: It can be tough to do any kind of financial planning on a zero hours contract, creating a state of permanent uncertainty.
In this situation they have the right to claim unfair dismissal from day one of their contract. In most cases, those working zero hours contracts will be classified as ‘workers’ rather than ‘employees’.
• protection from unfair dismissal • the statutory minimum notice of intention to terminate employment, • redundancy pay • the right to request flexible working • unpaid time off to care for defendants • protection in the event of a buyout or change of employer. Zero hours contracts shouldn’t pose a risk to a business if used correctly, with respect for the worker’s entitlements.
The biggest risk is incorrectly classifying someone as a worker, and treating them as such, when they are in fact an employee in the eyes of the law. • Offering annualized hours contracts if peaks in demand are known across a year.
If you need advice on determining which types of employment contracts are best for your business, our HR consultants can help. Zero hours contracts can be particularly appealing to people who need the flexibility of being able to turn down work, or not having a particular schedule.
Students in particular find these kinds of contracts a great way to work as you can turn down hours during busier study times. It can also be good for those that don’t mind working unusual hours outside the standard 9-5 that many jobs offer.
Make the most of the flexibility by showing your availability to work at short notice and at unusual times if possible. It can be incredibly tricky to plan your life around a zero hours contract as they may ask you to work at the last minute, which isn’t ideal for everybody.
Plus if you have children or other defendants that you need to arrange care for, it can be difficult if you’re not on a scheduled work scheme. Before you start at a company, try your best to ascertain how many hours are likely to be offered on a weekly or monthly basis, and whether they will mind you working elsewhere should they not meet your needs.
Zero Hours contract is an agreement between an employee and a company that doesn’t have any fixed time. It is one of the written contracts where there are different kinds of provisions set for the employment status, rights, and also some obligations for the employee.
As the business is not obligated, and it also provides many benefits to the people who are working full time. In addition to this, workers can also have their annual leave along with sick pay, rest breaks, and some rights and protection from any discrimination.
Such a contract is suitable for businesses that are providing excellent flexibility for the supply of workers. Especially when it comes to a new business, this contract is one of the best benefits for the staff members and also the form to get excellent flexibility.
Also, when it comes to seasonal events such as pleasure, hospitality, and catering, one can increase employee staff based on a contract, which can help them in a better way. Zero Hours contracts are also one of the advantages when it comes to the unexpected absence of any staff due to sickness or any emergencies.
This contract is quite famous in the UK and America, where there is excellent flexibility for an employment agreement. Zero Hours arrangements are quite relatable to public sectors, restaurants, retail outlets.
It is a backup for a firm, where one can rely upon the employee, who is dedicated for an extended period, but it is a temporary solution. But a company that already has staff members who are ready to do overtime for accomplishing the peak in demand should not opt for it.
A company must not use its agency staff for a temporary basis or any short notice just for the sake of meeting the business needs for a shorter period. So, in all such cases, hiring employees with Zero Hours contracts would not be considered a prudent practice.
One of the essential advantages of using Zero Hours contracts is it provides excellent flexibility to the employers. When it comes to organizations’ point of you, Zero Hours contracts are one of the best ways to get the work done quickly and effectively.
Zero Hours arrangements are one of the significant advantages for new businesses or start- ups who are finding flexibility in working. Also, organizations can hire people based on Zero Hours contracts, which will be quite cheaper, and it will ultimately result in less usage of funding.
When it comes to concern for employers, there can be differences such as delivering quality work and also of meeting the standards of the organization. Zero Hours contracts are quite tricky, and it can also reflect to work hard and get a proper employee status.
Zero Hours deals don’t have any obligation to accept work; moreover, it can be difficult for the employee to obtain any desired action. So, maintaining the company standards with all the employees can be a daunting task for an employer with such kinds of contracts.
This will let their work-force arrange their work schedule properly, plus the employees will also have the clarity that their jobs will not be canceled suddenly without any notice. On the concluding note, we hope you would have understood what the contract is and how it channelizes working in between employers and employees.
It therefore made sense to use a contract that provided retailers with the flexibility to offer workers varying levels of hours that could respond to the ebb and flow of trade. The Office for National Statistics (ONS) recently published figures from its Labor Force Survey that show a significant increase in the use of zero hours contracts.
Freedom of Information requests made by the Financial Times showed there are now almost 100,000 zero hours contracts in NHS hospitals, up 24% in the past two years. Traditional zero hours contracts allow companies to engage individuals as workers, rather than employees, on an “as required” basis, with no guarantee of work, and impose an obligation on workers to be available if and when required.
The increased use of zero hours contracts, coupled with the reduction in hours worked under such contracts, may actually help explain two important economic indicators: namely the lack of a major rise in unemployment, despite the poor macro environment, and the absence of an increase in productivity. As many businesses continue to struggle, the obvious financial benefits are of increasing importance.
Many employers see it as a good way of cutting costs and controlling headcount, all while ensuring at least some of their staff are engaged. The rise of zero hours contracts is the latest evidence that power is firmly with the employers, giving them the ability to be flexible in the face of tough economic times.
Companies across the US are laying off workers as the coronavirus pandemic cripples entire industries, from airlines to restaurants. But even workers who are on zero hour schedules or who are furloughed are eligible for unemployment benefits, according to Andrew Settler, a senior fellow at The Century Foundation.
“The only requirement for unemployment benefits is you had zero earnings in the prior week and your employer didn’t offer you any hours,” Settler told Business Insider. Reducing workers’ hours to zero but still keeping them on as employees can be a way for restaurants and other companies to cope with an economic downtown, according to Heidi Shithole, a senior economist and policy director at EPI.
“If you can keep people on for when your demand for your goods and services ramps back up, then you don’t have to go through hiring and retraining,” Shithole told Business Insider. If a worker is not being offered any hours and the employer says they’re not eligible for unemployment benefits, the employee is being given incorrect information and should apply anyway, according to Settler.
When it comes to applying for unemployment benefits, workers are not considered to be employed if they are not earning wages, according to Settler. In a time when virtually the entire restaurant industry is grinding to a halt, one of the baseline requirements for unemployment benefits may seem like a roadblock: that the applicant must be searching for a job.
But applicants can still make an effort to search for work even if the likelihood of getting hired appears to be nonexistent, according to Settler. Settler added that workers whose hours were reduced but not cut completely can also file for unemployment benefits.
The average amount an employer has to pay for an unemployment insurance claimant in the US is $US277 per year, according to US Department of Labor data. Shithole of EPI urges people to apply for unemployment benefits as soon as they’re laid off or have their hours cut.