What is a zero hour contract? If you run a small business, you might only need to employ extra staff on an ad-hoc basis. A zero hour contract, therefore, is a type of casual contract that you can use if you need staff but can’t offer them a set number of hours.
We’ve teamed up with Farillio to bring you a free zero-hours contract template. Farillio is a resource site that provides businesses with document downloads and other tools to help them get ahead.
Choose to download your template now, or get it directly from Farillio’s site where you’ll also get access to their full suite of customisable legal templates.
The attached document has been produced by Farillio so we can’t take responsibility for its contents. We'd recommend you take professional advice before making any important decisions based on its contents.
A zero hour contract is a type of contract you can use if you can’t offer staff constant work, or only need them on an ad-hoc basis.
If you have an employee on a zero hour contract, you don’t have to give them a minimum number of working hours – but they don’t have to accept work you offer them.
In practice, this means that if you have no work for someone on a zero hour contract, there’s no need to pay them for a set number of hours just because they’ve got a contract. They’re paid only for the hours they work.
In our zero hour contract template, the worker isn’t obliged to accept all or any of the work you offer them.
Your employees (including those on a zero hour contract) can be classed as either employees or workers depending on their contract and how they work in practice, including frequency of hours and type of work undertaken.
Workers are people contracted to do work personally for a company and sit somewhere between employees and the self-employed in terms of employment rights.
Employees work under an employment contract and have more employment rights than workers, including protection against unfair dismissal and time off for emergencies.
There’s no fixed answer to the issue of employment status of someone working on a zero hour contract.
Our zero hour contract template will often suggest that they’re workers rather than employees. But sometimes they’ll be classed as employees, especially if they work for you regularly and frequently for an extended period of time.
It’s best for you to consider the terms of the contract and how your staff member works in practice, and get professional advice if you’re not sure about anything.
As mentioned, rights depend on employment status – employees have more rights than workers. But every worker on a zero hour contract is entitled to:
You can’t stop a staff member on a zero-hours contract from working for someone else and you can’t treat them unfairly if they do work for someone else. If they’re legally classed as an employee, you can’t dismiss them for this either.
People on zero hour contracts have the same rights to rest and rest breaks as other employees and you’re responsible for their health and safety. You’ll also pay them through PAYE, deducting income tax and National Insurance.
A zero hour contract has advantages for both employers and staff.
It lets you set out a clear legal framework for ongoing employment, including performance reviews and grievance procedures. It can also help you establish a longstanding relationship with a worker, which could be beneficial over the long term.
For workers, they have rights and legal protections, so it might be more appealing than freelance or other temporary work.
The disadvantages of a zero hour contract for employers include the fact that staff don’t have to accept work that’s offered to them. You’re also unable to stop them working for someone else.
The staff member doesn’t have stability as they’re not being paid a regular income, and they can’t predict when work might come along next.
In our zero hours contract template, words in square brackets should be replaced or altered to match the specifics of your business.
When altering the contract make sure you read it through to check there are no conflicts or ambiguities – if you’re unsure, speak to a legal professional.
Farillio gives legal tools and templates to help you take control of your business’s journey. Many small businesses find that they don’t need (or have the money) to hire a lawyer. But when you do want legal advice, you want it to fit your needs as closely as possible.
That’s why we’ve teamed up with Farillio to bring you quality, relevant legal documentation that you can customise to fit your business’s needs.
Why not check out these other resources from Simply Business and Farillio:
We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer
6th Floor99 Gresham StreetLondonEC2V 7NG
Sol House29 St Katherine's StreetNorthamptonNN1 2QZ
© Copyright 2022 Simply Business. All Rights Reserved. Simply Business is a trading name of Xbridge Limited which is authorised and regulated by the Financial Conduct Authority (Financial Services Registration No: 313348). Xbridge Limited (No: 3967717) has its registered office at 6th Floor, 99 Gresham Street, London, EC2V 7NG.