Health check for zero hours contracts

Posted on July 11, 2016
Written by Caroline Dutot

A report by the Health and Social Security Scrutiny Panel released on 11 July 2016 suggests businesses who utilise zero hours contracts need to urgently review the terms of their use.  A zero hours contract is a contract under which work is offered by an employer as and when work is available but where no particular hours or times of work are specified. Zero hours contracts should be utilised where there is a need for a flexible workforce, as a consequence of fluctuations in workloads that mean there are weeks or months without the availability of any work.  Zero hours contracts should not be utilised in respect of an employee/employer relationship where there is any regular pattern to or consistency of work undertaken.  The employer must be under no obligation to offer work and the employee under no obligation to accept it. Yet the Scrutiny report finds that 27% of those working under zero hours contracts sometimes feel penalised for turning down work, with a further 12% always feeling penalised for turning down such work.  Once there is a pattern to a working arrangement and reliance on it from either side, the employer or employee, then discussions should take place about introducing a different type of employment contract.

In light of the findings of the Scrutiny report, businesses utilising zero hours contracts should urgently give consideration to the following:

  • Ensuring that both their managers and any zero hours employees have been provided with a copy of the JACS guidance on zero hours contracts:
  • Reviewing all zero hours contracts, especially those for employees who have been under such contracts for 6 months or more with a view to establishing whether a variable hours or fixed term contract with stated hours is more suitable.
  • Instigating a procedure to ensure that every zero hours contract is reviewed, at a minimum, every 6 months following its commencement.
  • Reviewing policies for the payment of annual leave entitlement for employees on zero hours contracts to ensure an additional 4% of the hourly rate is added to wages to cover the statutory entitlement to a minimum of 2 weeks annual leave.
  • A review of wages paid to zero hours employees to ensure they are paid at the same rate as permanent employees, unless a differential in pay rates can be justified.
  • The removal of any exclusivity clauses from zero hours contracts to prevent those engaged under such contracts from working for another organisation, or to prohibit workers from doing so without an employer’s consent.
  • A review of contracts concerning those working as carers under zero hours contracts to consider payment for time taken to travel to and from clients.

For further advice on the impact of zero hours contracts: Advocate Caroline Dutot can be contacted by telephone on 01534 481809 or by email on

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