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Zero hour contracts often make the news because of associated issues such as pay and questions about the status of the people working under these contracts. However, if used correctly, these contracts offer a great deal of flexibility for employers and workers.
Zero hour contracts are essentially an agreement where there is no guarantee of working hours so workers only receive pay for the hours they’ve actually worked.
They are common in businesses which are seasonal, such as retail or agriculture and it means that the business doesn’t have to pay wages during quiet periods.
The person working under the contract can either be an employee or a worker depending on whether they can turn down work when it is offered to them by the employer. The difference in status will afford zero hour’s staff different rights. For example, zero hour employees can claim unfair dismissal but workers can’t. However, all zero hours workers have statutory rights such as a right to be paid the National Minimum Wage or National Living Wage, the right to receive 5.6 working weeks of paid annual leave and the right to not be discriminated against.
An important part of flexibility for zero hour’s workers is that they can work for a second employer, even whilst under contract with their original employer. Previously, zero hours contracts could contain an exclusivity clause which meant that workers could not take up work with another employer, but these clauses have been made unlawful. This means that, even where the contract contains an exclusivity clause, the zero hours worker should not be treated less favourably because they are working for another company.