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Zero hours 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 hours 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. Due to their nature, contracts were mainly used in businesses that were seasonal, such as retail or agriculture, but more and more businesses are using these contracts to create a pool of workers who can be used for work at short notice. This is beneficial for businesses as they won’t have to pay staff who don’t work during quiet periods and these contracts are often less troublesome than fixed term or seasonal contracts.
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 hours staff different rights. For example, zero hours employees can claim unfair dismissal but workers can’t. However, all zero hours workers have statutory rights such as the 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 hours 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.
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