Zero hour contracts have become increasingly popular in the modern job market. When you have a zero hours arrangement, your workers get to choose when and how many hours they want to work. And you only need to pay zero hours workers when they do work.
While zero hour contracts provide you with a level of flexibility, concerns have arisen regarding the lack of job security and uncertainty of zero hour workers. One crucial aspect of zero hour contracts is the notice period.
Notice periods are difficult to manage regardless, but more so when it comes to managing a zero hour contract notice period. As you’re hiring staff on a casual basis, it’s hard to know whether zero hours contracts should actually include a notice period or not.
So, let's get into the legalities of zero hour contract notice periods and how they affect your zero hours contract workers and employees.
And what you should consider, to strike the right balance between a flexible schedule and job security.
Understanding zero hour contracts
A zero hour contract is an employment agreement where you don't guarantee a minimum of regular hours per calendar week or month. Instead, you offer work as or when you need it, and your zero hours employees have the discretion to accept work or decline work to fit their needs.
Generally speaking, industries such as hospitality, retail, and healthcare, are more likely to utilise zero hours contracts.
It’s recommended not to use zero hours contracts on a permanent basis unless there is a legitimate reason to do so.
If you require an employee for regular hours over a continuous period of time to maintain the core business operations, zero hour contracts might not be for you.
What are the employment rights of zero hour contract workers?
Everyone employed on a zero hour contract is entitled to statutory employment rights. There are no exceptions.
A person will benefit from the statutory rights associated with their employment status. For example, individuals on zero hours contracts will either have the employment status of a 'worker' or an ‘employee'.
This means that everyone who is on a zero hours contract is entitled to at least the National Minimum Wage, paid annual leave, rest breaks (rest between working days) and protection from discrimination.
The law on notice periods in zero hours contracts
You're not legally obliged to give zero hour workers a period of notice. This means you can terminate a worker’s zero hours contract without notice—and they can leave without any warning.
The reason for this is that most casual staff have the employment status of a ‘worker’, and they don’t have the same rights as those with the employment status of ‘employees’.
Those who have worker status are not entitled to make a statutory request for flexible working, claim unfair dismissal and have no statutory rights to a notice period.
If someone has employee status, they have the right to be given the statutory minimum notice of termination.
Those who have employee status are also therefore entitled to request flexible working and have the right to make an unfair dismissal claim.
Statutory notice period for employee status
Statutory notice periods are set based on the length of service of your employee. For those with less than one month service, no statutory notice is required from either party.
However, for employees with a month or more than a month but less than two years of service, the statutory minimum is one week notice. And for those with two years or more service, the statutory minimum is two weeks' notice.
Contractual notice period for employee status
Contractual notice periods are based on an agreed notice period that is stated in your employee's employment contract.
They can't be shorter than the statutory minimum, but they may be longer, providing added job security to your employees and allowing you more time to adjust to staffing changes.
How much notice pay do zero hours contract employees get?
The rules around notice pay, follow the same laws that apply to notice periods regarding zero hours contracts. Basically, it's based on their length of service or what's in their employment contract and any extra agreements that have been made.
It's worth noting that notice pay isn't the same as regular wages, and only comes into play when notice is given that the employment is ending.
Working out notice pay can be a bit of a headache, especially if their hours and pay vary all the time. Typically, it's based on how much you paid your employee on average over a certain period of time.
How notice periods affect those on zero hour contracts
Notice periods can have a significant impact on your zero hour workers and employees, affecting their financial stability and job security. Some key points to think about if you do want to issue them with notice are:
Providing longer notice periods can give them the opportunity to find new employment if you terminate their contract.
With zero hours contracts, income can vary significantly from one period to another. Notice periods can help them to plan their finances during the transition phase, knowing the exact period they will be employed until.
Access to benefits:
Choosing to provide a longer notice period over short notice may allow those in worker status to accrue benefits, such as holiday pay depending on your policy and legal requirements. This is also beneficial for your zero hour contract employees.
Employer's responsibilities for zero hour contract notice periods
While you’re under no legal obligation to, it's good practice to give your workers on zero hours contracts notice.
Implementing fair and reasonable notice periods is essential to maintaining a positive employer-employee relationship.
Some key points to consider if you do decide to terminate your zero hour contracts are:
You should clearly communicate the notice periods in employment contracts and make sure that your employees fully understand their employment rights and what the implications are if they breach the contract.
You should apply notice periods consistently across your workforce which should include your permanent employees, to avoid any discrimination or unfair practices.
While notice periods can provide stability, you should remain flexible to adapt to the changing business needs without compromising employee welfare.
See how BrightHR can help with a zero hours contract
Determining a notice period is a vital component of a zero hours contract as it establishes a level of job security and stability.
Achieving a fair and sustainable working relationship requires finding the right balance between flexibility and job security, which can be a challenging task.
And that’s not all, you can even get instant advice from BrightLightning our cutting-edge HR and health and safety A.I. platform, powered by over 11,000 questions answered by qualified experts.
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