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October 30, 2015

Legal Issues – BIS Guidance on Zero-Hours Contracts Published

On 15 October, the Department for Business, Innovation and Skills (BIS) published guidance on zero-hours contracts. This follows on from the provision in the Small Business, Enterprise and Employment Act 2015 prohibiting the use of exclusivity clauses or terms in any zero-hours contract stopping someone with no guaranteed hours from working for someone else.

Regardless of whether they are an employee or a worker, individuals on zero-hours contracts are entitled to protection from discrimination as well as having the right to the National Minimum Wage, paid annual leave and rest breaks. Those who are employees have additional statutory employment rights.

The BIS Guidance lists examples of where zero-hours contracts might be used appropriately. These include the obvious examples of seasonal working and special events as well as new businesses, cover for unexpected sickness or testing a service. They are not appropriate as a permanent arrangement unless this can be justified nor will they be appropriate where, in fact, the worker is likely to work regular hours.

The Guidance suggests employers consider alternatives to zero-hours contracts and these include:

  • Offering overtime to permanent staff to ensure experienced staff deal with temporary fluctuations in demand
  • Recruiting a part time employee or someone on a fixed term contract if regular hours need to be worked to adapt to a change in the business needs
  • Offering annualised hours contracts if peaks in demand are known across a year
  • Using agency staff can be a quicker and easier way to hire someone if staff are needed temporarily or at short notice

You can find the guidance here.

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