Is Being On 'Casual Terms' Ever Okay?
Before you read on, you might be surprised to note that I am not writing about personal relationships but instead the much maligned issue of using casual worker contracts or ‘zero hours’ contracts as they are more commonly known.
There is currently no ‘legal’ definition of what these contracts actually are but, generally speaking, they are contracts of employment under which an employee has no set hours and is paid only in relation to the hours worked. In all cases, the key similarity is that the contract does not oblige the employer to provide any work to the individual (though the individual may find themselves penalised or not offered more hours if they turn down work).
With the recent news that Sports Direct is going to guarantee hours to its staff currently on zero hours contracts (albeit that the very vast majority of their staff are agency workers), the question must be asked: Is it ever right to offer employees casual or zero hour contracts?
While these types of contracts have had a dreadful press over the last 3 years (mainly as a result of employers who have sought to limit their exposure to tribunal claims) they are, in fact, a legitimate tool for both employers and employees in the right circumstances.
Consider this: You own a small business which is very seasonal in nature. Your peak hours occur over the Spring/Summer months and then there is a huge slowdown in available work over Autumn, even more so in Winter. If you had a regular employment contract in place and you tried to reduce the employee’s hours of work without agreement, you would be in breach of his or her employment contract. For employees with over 2 year’s service, there could be the added complication of a constructive unfair dismissal claim. All very sobering stuff!
Used in appropriate circumstances, a zero hours contract will help the business make essential changes to hours of work without being in breach of contract. What caused the disgust of the nation was that some companies appeared to be using these types of contracts where there wasn’t such a significant change in working hours (ie in shop work which was steady and hardly seasonal). Accordingly, employees were at the mercy of an employer who might have used the right to change hours for whatever arbitrary reason they saw fit. Recent examples in the press were given of individuals who had taken sick leave and then found that they weren’t given hours for the next rota, effectively dismissing them from their jobs.
However, what was reported about how these contracts work in practice and what they actually prevent has certainly been the product of scaremongering and half-truths.
Some individuals on these types of contracts will have employment status and will have full employment protection. Others would be classed as workers, but will still have a statutory right to holiday pay. Subject to satisfying certain criteria, many would also be entitled to sick pay. Other protection is awarded in the form of anti-discrimination legislation and auto-enrolment onto pension schemes. In truth, there is still protection available to these individuals and some employees will relish the idea that they can pick and chose the work on offer as it might suit their circumstances. The government’s response to all of this was to suggest removal of any exclusivity clauses in such contracts, meaning those on such contracts can have lots of different zero hours contracts with different businesses and chose the work which is most suitable or lucrative. Hardly earth-shattering reform, but it would seem that there has been a marked decline in the use of these types of contracts anyway due to the ‘bad press’ that they have had. However, we have still been drafting these for clients where work can’t be guaranteed and these have been successfully rolled out for our clients in many different sectors.
If you have any questions about the types of contracts that you use, why not call for a confidential review to see whether your contracts do what you hope they do?