The employer's guide to zero-hours contracts - as published in HR Magazine

3 mins

Posted on 07 May 2015

Given recent press coverage and the trend for businesses being 'named and shamed', it is now more important than ever for them to evaluate whether they need to reduce the risks associated with zero-hours contracts. 

Here are some key issues to bear in mind over the coming weeks.

Can employers still get round the rules?

The Conservatives have proposed an exclusivity ban (so zero-hours workers can’t be prevented from working for anyone else) and anti-avoidance measures that will give workers the protection of being able to bring tribunal claims if they are subjected to detrimental treatment (such as having their hours cut) after also working for other businesses.

But what about employers using a clause that is not strictly an exclusivity clause, but that states the worker must seek the company’s consent before he or she works for anyone else? The answer is: no, this cannot be used as the legislation prevents it.

What about another sort of ‘pseudo exclusivity clause’ stating the worker cannot work for a competitor, or cannot do so without consent? The answer: it would be surprising if the legislation prevents such provisions although on the face of it, it could be argued that it does.

However, with the current employment tribunal fees a zero-hours worker may not be in a position financially to enforce their right.

Labour has proposed that those who work regular hours for more than 12 weeks will have a right to a regular contract, but what is meant by ‘regular hours’ during 12 weeks? Until further detail is released it seems employers could circumvent the rules by deliberately not offering regular hours to employees over this time frame.

What should employers using zero-hours contracts do?

Given that exclusivity bans are likely to come into force (whichever party wins the election), employers should assess whether current zero-hours contracts contain exclusivity clauses and if so why were they included. If they were present as a matter of course but are not important to the company it should inform workers that it will not be enforcing them.

If the company relies heavily on the exclusivity clause it could consider inserting instead the 'pseudo exclusivity' clause in relation to competitors: but be warned – this has not been tested.

Employers could also consider alternatives, putting the worker on a normal permanent employment contract specifying their hours for instance. The business could also consider fixed-term contracts or agency worker arrangements if these will take them through a busy period.

Be careful about renewing a fixed-term contract however – successive renewals can result in the fixed-term contract becoming a permanent contract. Also agency worker arrangements may not provide as much flexibility as companies might think. For instance, agency workers have the right to the same pay and other basic working conditions as equivalent permanent staff after a 12-week qualifying period.

Issues also still remain over whether those engaged under zero-hours contracts are employees (with associated rights such as unfair dismissal rights after two years' service) or casual workers with less legal protection.

This depends on how the contract is drafted and how it is operated in practice. To avoid employment rights challenges, use a carefully drafted contract that accurately reflects the relationship between the company and the worker. Beware of getting into a pattern of regularly offering work and do not require the worker to accept each and every assignment (to ensure there is no mutuality of obligation) – such steps will help protect true ‘casual worker’ status.

This article, written by Priya Chanda-Wilson, was originally published in HR Magazine at

The articles published on this website, current at the date of publication, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your own circumstances should always be sought separately before taking any action.