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A “zero-hour contract” refers to a contract between a business and a casual worker, usually for ad hoc or on-call work, such as seasonal event work. It offers flexibility for both sides, as employers are not obliged to offer guaranteed hours of work and casual workers do not have to accept work when asked.
These contracts can be particularly beneficial in the hospitality industry given the seasonality of the demand for staff. They allow an employer to have a flexible pool of staff available to call upon if work becomes available, but without any commitment to offer work.
However, there are downsides. The flexibility of zero-hour contracts also means a high staff turnover. The lack of commitment to work from both parties can have a negative impact.
Zero hours does not mean zero rights
Zero-hour workers have the same protections under wage and discrimination laws as other staff. They are entitled to statutory annual leave and the national minimum wage. They also have the right to take rest breaks, and pension auto-enrollment may also apply if they meet the relevant qualifying conditions.
Employers should be careful not to overlook the special protections for zero-hour workers. Since May 2015, exclusivity terms have been unenforceable in zero-hour contracts. This means that employers cannot stop casual workers from getting work elsewhere. Accordingly, casual workers can disregard any contractual clause that attempts to restrict their ability to seek or accept other work.
Starting December 5, 2022, this exclusivity ban was extended to apply to all low-income workers (the UK’s lower earnings limit is currently £123 a week).
Zero-hour workers are useful in the hospitality industry as they allow flexibility to deal with fluctuating demand. Casual staff get the same protections as other staff, but in a few ways, they get extra protection, which means that employers cannot stop them from seeking and accepting work elsewhere.
- Zero-hour contracts give hospitality employers flexibility when meeting seasonal demand for staff and when it is difficult to predict staffing requirements.
- Employers should not try to stop casual workers from getting work elsewhere.
- Contractual clauses that restrict casual workers from other employment are void.
- The ban on exclusivity clauses has been extended to low-income workers.