Casual Contracts, otherwise known as “Zero Hours Contracts” have had a lot of bad press over recent years. Which is a shame because they’re a great business tool and offer flexible employment to people who – for whatever reason – don’t want a regular job. So what’s the problem?
It’s a misunderstanding really. That same old problem… managers don’t go into management to be employment law experts and the law gets complicated! Things change, they roll with it, before they know it Things. Get. Messy.
Why would I want to use Casual Contracts anyway?
Sometimes you just need people to work for you on an ad-hoc basis because your business – or at least that job – is based on a need that changes week to week. You want to be able to call people up as and when you need them, which might not be all that often. The drawback is that, while you have no obligation to offer them any work, they also have no obligation to take it when it is offered. So there’s no guarantee that they’ll be available when you need them.
“Bottom line, it doesn’t matter what the contract says, the law will look at the reality of the job. If you’re giving casual workers regular hours but with a zero-hours contract, you could hit trouble.”
When SHOULD I use Casual Contracts?
Casual Contracts / Zero-Hours Contracts are for use when you don’t want to commit to giving someone hours regularly. So for example, let’s say you run a shop . You employ as many staff as you need to run that shop. All great until the summer holidays when people are away and things get tight. This is an ideal scenario to take someone on to cover as and when they’re needed on a casual contract. You don’t have regular weekly hours to provide – it’s no good offering someone a contract to work 20 hours per week if you don’t have 20 hours to give them every week and in reality the hours are going to vary wildly.
When SHOULDN’T I use Casual Contracts?
In a nutshell, if you’re going to offer someone hours regularly, you should do it on a regular employment contract. Even if those hours might vary, let’s say you’re going to need that person definitely for 20 hours per week, but you might actually be able to give them extra hours. In this case, you should give them an employment contract for 20 hours per week and treat anything extra as overtime.
The other consideration is whether you really need continuity. If you want to guarantee that someone is going to come in to work (ignoring sick leave or other leave entitlements), you need an employee. But if you have say 10 people on a casual register and you don’t mind which one of them does the work, then casual could be the way to go.
Why is it a big deal?
Well, it’s a big deal for the person doing the work. If they’re a casual, then in law they have “WORKER” status. That means that they still get accrued holiday pay (but paid in a different way) but they may not qualify for other employment rights, such as sick pay, parental leave, notice pay, the right to transfer under TUPE if the business is sold or their function is outsourced… and so on. They have no guarantee of being offered any work at all.
And of course, it’s a big deal for the employer if they suddenly find they’ve got it horribly wrong and end up with a tribunal or a claim for a cost they hadn’t considered.
Flexibility can work both ways, so why do Casual Contracts have such a bad name?
The problem comes when an employer tells someone they’re a Casual Worker, gives them a Zero-Hours casual contract and then treats them as an employee – in all but their employment rights. So they start giving them regular hours, they expect them to come into work each week, they accrue holiday pay in the wrong way… but then when it comes to time off sick, there’s no SSP because that’s what the contract says. Or they outsource the department and don’t include the Casual Workers on the transfer to the new employer, because they’re not employees. Or they decide they don’t need them anymore after a few years and don’t consult or pay any redundancy pay… because that’s what the contract says.
Bottom line, it doesn’t matter what the contract says, the law will look at the reality of the job. If you’re giving casual workers regular hours but with a zero-hours contract, you could hit trouble.
If you’re now looking at your business’s situation thinking “ok now I’m really not sure whether I’m doing this right”, you might benefit from signing up to HR on Tap’s service. Drop us an email to see how we can help!