A Guide to Zero Hour Contract Entitlements

Zero hours contract staff rights remain a major talking point for employers. 

With nearly two million people in the UK relying on them for work, it’s important for you to know the laws so your business can remain compliant.

Find out the essential details and our industry-leading analysis.

What are the rights of staff on zero hour contracts?

Zero hour contract workers have the same basic employment rights and protections as other staff members, such as working hours. Where it starts to get tricky is with determining employment status.

To help you work this out, let’s look at the differences between an employee and worker:

• A worker receives employment rights such as National Minimum Wage, paid holiday, anti-discrimination rights, and no unlawful deductions on a rest break or wages.
• An employee has all of the above, but also redundancy pay, maternity leave, flexible working, and legal protection against unfair dismissals.

But how do you tell the difference between the two? It’s not always clear-cut, but you should consider factors such as:

• The level of control you have over the staff member.
• What duty takes place in work offers and tasks being carried out.
• The financial risk of potential work incidents.
• If the staff member requires equipment to complete their job.
• How they are paid.

To simplify matters, consider a worker as someone who works on a casual basis. The result? Due to the nature of zero hour contracts, you can class most of them as workers.

This is mainly as there’s no mutuality of obligation. What’s that? Well, it’s where the employer provides work and offers a wage—the obligation here is you have to offer work, which the worker can then accept or turn down.

With this type of contract, the employer doesn’t have to offer any work. Even when they do, the worker doesn’t have to accept. You must also factor HMRC and employment tribunals. They will consider details beyond your staff member being a “worker.”

Instead, they’ll consider the policies you have in your zero hour contract, as well as the work the individual carries out, and if this will develop over time.

Can they become an employee?

If a worker engages in regular ad-hoc work but still has the right to turn down any work offers, they cannot be an employee.

If an employer makes the working arrangement regular, and the worker agrees to work these shifts on days with a set pattern, they may be able to become an employee.

If the employment is then broken, as an employer you must remember your responsibility to pay them for any accrued, but untaken, holidays.

Can they work for another employer?

Yes, zero hour contract workers can find work with another employer. It is, in fact, illegal to block them from taking any other work.

In summary

Zero hour contracts can prove complicated and frustrating for employers, primarily as they remain a relatively new form of employment.

To summarise the above in bite-sized form, here are some of the important facts you’ll want to keep in mind for your workers’ rights:

• National Minimum Wage, National Living Wage, and paid annual leave are all mandatory.
• Most staff on a zero hour contract will be workers, not employees.
• Workers have no obligation to accept any work you offer them.
• It’s possible for a zero hour contract worker to become an employee, dependant on the number of hours agreed.

For other common issues, such as zero hour contract notice period or zero hour contract maternity pay rights, or sick pay - you can get clued up with our other guides.

We’re here to help

If you’re uncertain about any of the above, get in touch with us and we’ll be happy to answer your questions: 0800 028 2420.