Zero-hours contracts

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The Department for Business, Innovation and Skills has published employer guidance on zero-hours contracts setting out best practice and outlining appropriate and inappropriate use of such contracts. The guidance states that zero hours contracts should not be considered as an alternative to proper business planning and should not be used as a permanent arrangement unless this can be justified.

It is clear that zero hours contracts will probably not be appropriate if the job involves an individual working regular hours over a continuous period of time. The example given in the guidance is that of an individual asked to work from 9am to 1pm, Monday to Wednesday for a 12 month period. In this case, it would be more appropriate to offer that worker a permanent part time contract or a fixed term contract.

The guidance recognises that zero hours contracts might be useful for unexpected or irregular events or to deliver appropriate levels of customer service during peaks in demand. Where, however, the business provides a regular service or product with a broadly predictable timetable or output, permanent or fixed hour contracts are probably more appropriate.

Alternatives to using zero-hours contracts might include:

  • offering overtime to permanent staff to deal with temporary fluctuations in demand
  • recruiting a part time employee or someone on a fixed term contract if regular hours need to be worked to adapt to a change in the business needs
  • offering annualised hours contracts if annual peaks in demand are predictable
  • using agency staff if staff are needed temporarily or at short notice

Finally, remember that all workers, however ‘casual’ they may be, are entitled to protection under the National Minimum Wage and Working Time Act.