Zero-Hours Contract: Employment with no guaranteed hours; employees work when needed.
Zero-hours contract
A zero hours contract is a flexible employment arrangement where workers have no guaranteed working hours, and employers can offer work as needed.
This type of employment contract has become increasingly common in sectors with fluctuating demand, such as hospitality, retail, and healthcare. Unlike traditional employment contracts that guarantee a set number of hours per week, zero hours contracts provide maximum flexibility for both parties.
Consider a busy restaurant that experiences unpredictable customer flow. During peak seasons, they might need extra staff several times a week, while during slow periods, they might only need additional help occasionally. A zero hours contract allows the restaurant to scale their workforce according to actual demand.
Zero hours contracts vs. casual work: understanding the difference
While zero hours contracts and casual work arrangements might seem similar at first glance, they represent distinct forms of employment with important legal and practical differences. Zero hours contracts establish an ongoing employment relationship where the worker is officially an employee of the organization, even when they’re not actively working. This means they receive statutory employment rights such as holiday pay, sick pay, and protection against discrimination from day one of their employment. The contract remains in force between work assignments, creating a continuous employment relationship.
Casual work, on the other hand, typically involves a series of separate, discrete engagements where each period of work stands alone as a separate contract. Casual workers might be hired for specific events, projects, or seasonal work, with no expectation of ongoing employment between these assignments. While casual workers also have certain basic rights, their employment status may be less clear-cut, and they might need to establish certain qualifying periods before accessing some employment rights. For example, a wedding photographer hired for individual events would be a casual worker, while a retail employee who remains on the company’s books but works variable hours would be on a zero hours contract.
The key practical difference lies in the continuity of the employment relationship: zero hours contracts maintain a permanent employment status even during periods without work, while casual work represents separate, distinct periods of employment. This distinction affects everything from tax treatment to employment rights and should be carefully considered when choosing between these arrangements.
How we can help
Zelos is an on-demand workforce management app for distributing work to an internal talent pool. It’s a priceless assistant for quickly scheduling open slots to staff on zero-hours contracts. Sign up for a free project on our website to take a tour!