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Employment

Zero hour contracts: Know your rights

Contrary to common misconceptions, zero hour contract workers are entitled to sick and holiday pay. Here’s everything you need to know about the controversial employment model.

Zero hour contracts, often described as insecure work or casual contracts, are commonplace in the hospitality and retail sector, and can in theory offer flexibility for both employer and employee.

They are also increasing, with 3.9 per cent more people working zero hour contracts in August compared to the same period in 2019. 

We’re here to answer your questions around zero hours contracts so you don’t get taken for a ride.

What are zero hour contracts?

A zero hour contract refers to any type of contract where the employer is not obliged to provide any minimum number of working hours to the employee. So one week the employee could be asked to work 24 hours, the next it could be seven, and the next it could be dropped to none at all. 

Equally, the employee is not obliged to work a set number of hours, so one week they might have high availability, and the next they may only have a couple of hours free to work. 

The hospitality sector, care work, deliveries and NHS bank staff often rely on staff working zero hours contracts. 

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They are legal in the UK as long as the employer continues to abide by statutory rights afforded to all employees. These include the national minimum wage, paid holiday, and the right to take rest breaks.

What rights do you have on a zero hour contract?

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Do you get holiday pay on zero hour contracts?

Yes. All workers are entitled to holiday pay that builds up the more they work. People working zero hour contracts are entitled to the same annual leave as any other employee, however it is accrued in relation to the amount of time they work. 

A person who works full-time is legally entitled to 28 days (including bank holidays) of paid days off. Employees on casual contracts accrue annual leave from the first day of their employment, just like a normal full-time employee.

According to HR company Moorepay, holiday is accrued at a rate of 12.07 per cent per hour, meaning that someone on a casual contract working ten hours in a week would have accrued 1.2 hours holiday. After seven weeks, they would have accrued enough holiday pay for a full day of paid holiday.

Employers may not be aware of, or choose to ignore, their casual workers’ holiday entitlements, so although they shouldn’t have to, workers on zero hour contracts may want to keep track of their hours and make sure they get the holiday pay they are entitled to.

Do you get rest breaks on zero hours contracts? 

Yes. Under UK law, employees are entitled to one uninterrupted rest break for twenty minutes for every six hours they work. This is no different for workers and employees on zero hour contracts.

Do you get sick pay on zero hour contracts?  

It’s complicated, but usually not. 

All employees are entitled to £95.85 a week statutory sick pay (SSP) for up to 28 weeks. This works out to less than £20 per day. 

Staff are only entitled to SSP for the days they would have been scheduled to work and don’t get it for the first three days they’re off. They must also have earnt an average of at least £120 per week (before tax) in the past eight weeks.

Because people on zero hour contracts rarely have shifts scheduled for more than one or two weeks in advance, it is unlikely they will receive much if any sick pay. 

If an employee falls sick and can’t work on a Monday, and they have three shifts scheduled for the week, they will be entitled to statutory sick pay for the shifts they had been scheduled to work from Thursday onwards.

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What about maternity and paternity leave?

Again, complicated, but likely not.

The right to statutory maternity pay or sick pay still exists for those on zero hour contracts, however the requirements can be hard to meet for someone not receiving a guaranteed income.

To receive statutory maternity or paternity pay the employee must have been earning on average at least £112 per week, and have been employed continuously for at least 26 weeks by the 15th week before the baby is due.

If a member of staff doesn’t receive any shifts for a full calendar week – seven consecutive days from Sunday to the following Saturday – this usually counts as a break in employment. 

Therefore if an employee has one week break in their employment during a certain period of their pregnancy, they may no longer be entitled to maternity pay. 

Can you work for more than one employer on zero hour contracts?

Yes, and many workers do, as zero hour contracts rarely guarantee enough hours to live on alone.

Employers, by law, can’t stop someone working for another employer by putting an ‘exclusivity clause’ in their contract – something that full-time salaried jobs are able to do. 

They are also not allowed to treat an employee unfairly if they do work for another employer, and could be taken to an employment tribunal if they do.

Can you refuse a zero hour contract?

An employee can refuse to sign a contract that does not guarantee them a certain number of hours, however there is no way of forcing an employer to provide a better contract. 

People on zero hour contracts are often faced with the fear that if they complain to their employer about anything from unsociable hours to bullying, their hours could be cut. 

One way to deal with bad treatment at work, particularly when working on insecure contracts, is to join a union, which will try to help you to get a better deal.

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What problems do employees on zero hour contracts face?

Employers hold all the cards when it comes to zero hours contracts, as they can chose how many, or how few hours an employee will be offered to work. 

Unable to depend on regularly scheduled hours or a guaranteed income, employees can find it difficult to plan their finances or balance work with other commitments such as childcare. 

Certain financial services including credit cards, bank loans and mortgages require proof of a stable income, which many zero hour contract workers cannot provide due to the lack of guaranteed hours in their contracts.

Employers sometimes withhold hours from staff as a form of punishment if they are unavailable to work the hours their bosses want, or as a way of cajoling them into working.

Who are the campaigners calling for zero hour contracts to be banned? 

Trade unions including the Trades Union Congress (TUC), Unison, Unite and GMB have called for years for an end to zero hour contracts. 

In a recent survey conducted by the TUC and the equality organisation Race on the Agenda (Rota), they were described as “the most egregious example of one-sided flexibility at work”, handing the employer total control over their workers’ hours.

The report also found that minority ethnic women are almost twice as likely to be on zero hour contracts as white men.

Over half of working people in the UK want a clampdown on zero hour contracts, according to a survey from the Trades Union Congress and GQR Research. 

The survey also found that 20 per cent of workers oppose banning zero hour contracts. At the same time, 70 per cent believed that workers should have the right to 28 days’ notice before shift patterns are allocated. 

Labour reconfirmed its commitment to banning zero hour contracts if elected at its annual conference, where members also voted in favour of a £15 minimum wage

Ireland banned zero hour contracts in almost all circumstances in 2019. The legislation also gave workers the right to compensation from their employer if they turn up for a shift but are sent home without work. 

Are there any advantages to zero hour contracts?

Zero hour contracts allow workers flexibility in how much time they want to commit to their work. For example students or parents may find them useful as they could pick up more hours during periods when they have more time available, and are not obligated to do a set amount at times when they are lacking in time.

This flexibility works both ways, giving employers flexibility in how many or few hours they allocate staff without having to give notice. Employers may ask staff to work 40 hours during a busy season, say at Christmas, and then drop those hours to minimal or zero once the rush has passed. 

What’s the gig economy got to do with zero hour contracts?

Gig economy workers tend to be on zero-hour contracts or short-term, freelance contracts rather than permanent jobs with a set number of hours. They are otherwise known as independent contractors.

However, people working in the gig economy are often paid per gig (or job) that they complete, rather than a set hourly rate. 

A quarter of people working in the gig economy were earning less than minimum wage (since rebranded as the national living wage) in 2018, according to NatCen Social Research analysis.

The same year, a government report showed nearly 90 per cent of gig economy workers were paid less than £10,000 per year.

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