FROM NOUGHT TO NAUGHTY!
There is so much in the news these days about zero hours’ contracts. We have Vince Cable expressing his concern about them and now we have Ed Miliband vowing that “Labour will end the abuse of zero hour contracts”. He goes on to say that unscrupulous employers use these contracts to avoid paying holiday pay and/or sick pay.
The important word to note in Mr Miliband’s vow is “abuse”. Zero hours’ contracts, if used responsibly can be extremely beneficial to both employees and employers alike.
Take an example of an employer who has seasonal work which fluctuates for a variety of reasons. They employ staff, train them up and spend a lot of time inducting them into their company. Hopefully a good working relationship is developed. Then, the need for the product/service drops off and they no longer need the employee at that point in time. The advantage of a zero hours contract in this case is that the employee who has received training; has been fully inducted into the Company and has established a good working relationship, has the option to return when the workload improves. He/she can simply slot back into the work without having the hassle of job-hunting, attending interviews etc.
Take the other example, this time of an individual who perhaps like to travel for period of time, or who has other interests they want to pursue and do not want to be tied down to a full-time position, the zero hours contract would suit them down to the ground – it gives them the freedom to do other things, yet still have the comfort of a job to return to when this becomes available.
Where these contracts have got a bad name is when employers use them, or try to use them, to exploit employees – by laying them off without notice and not paying them sick or holiday pay.
Well, the good news is that paying holiday pay for employees is a legal requirement and failing to pay it could lead to an employer being taken on legally in an unfair pay claim. The simple fact is that for every 8.3 hours an employee works, they are entitled to 1 hour’s holiday pay.
As far as sick pay goes, this depends on their earnings. Provided they earn the appropriate amount of wage/salary which puts them above the threshold determined by HMRC for paying PAYE and National Insurance, they are entitled to Statutory Sick Pay.
So, don’t throw your hands up in despair and rush out to change your zero hours contracts just yet, but make sure that you are acting responsibly and complying with the correct legislation - in which case you could have a win-win relationship and what could be fairer than that?
HR DEPT (Herefordshire)
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