Changes To Zero Hours Contracts That Are Being Considered
In the UK job market, zero-hours contracts are becoming a hot topic of conversation. These contracts are controversial because of their inherent employment insecurity and potential for abuse, even though they theoretically give flexibility to both employers and employees.
Without a minimum number of working hours guaranteed, zero-hours contracts leave workers unsure of their income and job security. Critics contend that businesses would utilise them as a means of avoiding offering benefits like sick leave and holiday pay, which would put employees through financial hardship and psychological stress. Furthermore, the absence of fixed hours can impede professional growth and advancement prospects, rendering these contracts controversial in today’s labour market.
Below is a thorough explanation of zero-hours contracts, their legal ramifications, best practices for employers and employees, and suggestions for reforming these contentious employment agreements.
Status of employment
Depending on the nature of their work and the conditions of their contract, workers on zero-hours contracts may be categorised as either employees or labourers. Its classification impacts their entitlements and rights.
- Employees: These individuals are entitled to fundamental employment rights, including the National Minimum Wage, paid yearly leave, and immunity from illegal discrimination.
- In addition, employees are entitled to statutory sick pay, maternity and paternity leave, redundancy benefits, and protection from wrongful termination.
Entitlements and rights
- Pay: Depending on their age, employees on zero-hours contracts are eligible for either the National Minimum Wage or the National Living Wage. Employers are responsible for making sure that employees receive payment for all of the time they put in, including time spent on required training or on-call work. The following are the UK’s current pay rates as of April 2024:
- The National Living Wage is £11.44 per hour for everyone over the age of 21.
- The national minimum wage is £8.60 per hour for people between the ages of 18 and 20.
- For those under 18, the national minimum wage is £6.40 per hour.
- The rate for Apprentices: £6.40 per hour
2. Holiday pay: Employees on zero-hour contracts are eligible for yearly leave compensation. The number of hours worked is used to determine how much leave is granted. Typically, this translates to 12.07% of the hours spent during a year.
3. Sick pay: Workers with zero-hour contracts may be eligible for Statutory Sick Pay (SSP) provided certain requirements are met, such as earning more than the Lower Earnings Limit.
4. Rights to maternity and paternity leave and compensation: If they meet the requirements, workers on zero-hour contracts are entitled to maternity, paternity, and adoption leave and compensation.
5. Protection from Unfair Treatment: Employees under zero-hour contracts are shielded from discrimination and unfair treatment. Workers who refuse to work or who stand up for their rights as employees cannot be punished by their employers.
Employers’ best practices
1. Clear communication: Employers must make sure that workers are aware of the terms and circumstances of zero-hour contracts, including the type of work being done, the pay scale, and how to offer and accept work.
2. Equitable treatment — Employers must make sure that workers under zero-hour contracts receive the same treatment as other employees, on an even playing field. Equal chances for training and development are part of this.
3. Record keeping: It’s essential to keep correct records of the number of hours worked, compensation, and leave entitlements to comply with employment regulations and settle any potential disputes.
4. Regular reviews: To make sure they are satisfying business demands and regulatory requirements, employers should routinely examine how they are using zero-hours contracts. One aspect of this is determining if zero-hour contracts are the best option for their workers.
Potential changes to zero-hour contracts
The Conservative Government had established laws allowing those on zero-hour contracts to legally request written terms that more accurately reflect their working conditions before the general election. The Labour Government has now shelved this legislation, reiterating its own goal of ending “one-sided flexibility” in employment, which it sees as unfairly benefiting employers at the expense of employees.
According to the Government’s current proposals, it will:
- Labour intends to outlaw zero-hour contracts that are exploitative and do not guarantee a minimum number of hours worked.
- Give employees the right to contracts that accurately reflect the number of hours they typically put in. Employees would be entitled to a contract that, based on a 12-week reference period, mirrored the hours they usually worked.
- Notice of shift changes: Employees will be given a fair amount of notice for any shift changes, and they shall be compensated for last-minute cancellations.