Guidance on zero-hours contracts

Back in May, we reported that the provisions in the Small Business, Enterprise and Employment Act 2015 that make exclusivity clauses in zero-hours contracts unenforceable had come into force.

The Government has now issued Guidance for employers on the use of zero-hours contracts, which are described as “a non-legal term used to describe many different types of casual agreements between an employer and an individual.” 

Employers are reminded that they must pay at least the National Minimum Wage, irrespective of how many hours are offered, and that zero-hours contracts should not be used on a permanent basis if it is not warranted.  The Guidance also reiterates that the contract should be “clear and transparent” so the individual entering into it can fully appreciate their rights.    

Examples of when the use of zero-hour contracts may be appropriate are suggested to be:

• New businesses – where there is a fluctuating/unpredictable need for staff
• Seasonal work – where the demand for work can surge (e.g. at Christmas)
• Unexpected sickness – where cover may be required to cover key roles
• Special events – where experienced staff may be needed by a venue/restaurant if an event is booked
• Testing a service – where there may be a requirement for staff on an ad-hoc basis if a business is testing a service they are thinking about providing

The Guidance also sets out alternatives to the use of zero-hour contracts, which include:

• the use of temporary agency staff
• offering overtime to permanent staff
• recruitment of part-time/fixed-term staff