Thursday, 31 October 2013

Hero or zero - the rise of the zero hour contract

Having spent the last 6 years enjoying lie-ins, watching daytime TV and everything else that loveable students are renowned for, I fought my way through the rigorous B P Collins trainee contract selection process and now find myself in employment, literally, as my first seat is in the Employment practice group.

Joining a new job and practice group is daunting, not only do you have to learn everyone's name and drink preferences but the quirks and processes particular to each area of law. This is made all the more challenging in an area such as Employment, where the law is so dynamic and ever changing.

This made me think about how difficult it must be for employers and HR staff to keep abreast of the latest Employment Law changes and updates. One such example is the increase in the national minimum wage which has changed to £6.31 for employees aged 21 and over from 1 October 2013.

Whilst undertaking some research for an employment contract review, the recent Government discussion on 'zero hour contracts' caught my attention. These contracts leave an employee's hours to be worked deliberately undefined, allowing employers to have flexible working arrangements as they are not restrained by a term in the contract of employment. It also provides employees with the ability to pick and choose when they actually work.

Over recent months it has come to the Government's attention that these contracts are far more widely used than previously realised, with an estimated one million workers in the UK having a zero hour contract, many of which are students.

There are growing concerns that these sorts of contracts are susceptible to abuse by employers, because employees are usually put on to 'standby'. By doing so employers expect employees to be available to work even though they may not be required to and if they do not work then they do not receive payment.

It is understandable that there are benefits for both sides from such an employment relationship. This means that employers have the ability to tailor every day the number of employees working to meet particular business requirements. For example, in the run up to Christmas, retailers can ask staff to work more shifts than they might do during the summer months. This allows the business to manage their cash flow more effectively and to use their staffing resources more efficiently, which is all the more important given the tough economic environment that exists at present for retailers.

The workforce also enjoys the added benefits of these contracts. As a former student, I can completely understand the novelty of being able to pick and choose your working hours around your, ahem, 'studies'. However, students and other workers on similar contracts should be aware from the outset what their status and subsequent rights under their contracts are. Those unsure about this then they should ask their employer to clarify these for them.

Employers need to be aware of the drafting of a zero hour contract. They must ensure their staff is made fully aware of the relevant terms when they are presented with the contract, so that the employee understands the nature of the contract, their rights under it and what is expected from them.

At B P Collins, we offer a complimentary employment contract review service for businesses who might be concerned that their employment contracts are not providing the legal coverage which they would hope to achieve.

Dealing with such issues in my training contract does bring what I learnt at University to life and reassures me that those 6 years studying didn't just prepare me for making beans on toast. How to come to terms with not watching 'Countdown' everyday though is something I certainly was not prepared for.

Posted by Thomas Bird, trainee in the employment practice.

Thomas Bird started his training contract with B P Collins in September 2013. He graduated with a first class honours in International Business in 2010 before completing a Masters in Law at the University of Sheffield, attaining a commendation. Thomas worked as a paralegal within the Litigation and Dispute Resolution team for 3 months in 2012 and also gained legal experience at a well-respected firm in Leeds in 2011.

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