A zero-hours worker is an employee that works for you, who has not been appointed fixed hours in the working week. As far as you, the business owner is concerned, they act like a tap that you can bring in whenever you need the extra help during the week.
5 Quick facts you should know:
- They must have a contract to count as a zero-hours worker
- They are entitled to as much notice as any other worker
- Zero-hours workers are entitled to the same amount of holiday pay as any other worker
- They are protected against unfair dismissal – and have all the same employment law rights as all other employees
- They are entitled to the same amount of sick pay as all other workers
Nb. The exact amount each zero-hours worker is owed should be specified in their contract – and if not, then they are entitled to the statutory minimum.
What constitutes a zero-hours worker?
Unsurprisingly, just like with all other employees, there is a formal process you must follow whilst employing a zero-hours worker. They must have a contract when working for you, and if not – then they don’t count as a zero-hours worker. If they have no contract, then they are a part-time worker, not a zero-hours worker.
You must have the correct wording in your contract for it to count as a zero-hours worker contract. It is not enough to state that they have variable hours.
You need to state
- That you do not guarantee to give them any minimum number of hours every week.
- That they have the right to refuse work without penalty
You are also not allowed to restrict them working for someone else outside of their work for you. That clause needs to be removed from the zero hours contract for it to be valid.
Zero hours workers are workers, and under employment law, workers can have lesser statutory entitlements. However, most employers do not use zero hours as zero hours workers.
They give them fairly regular hours, on the same days each week. Which makes them, through custom and practice, a part time worker. So to avoid yet another claim at tribunal, it is best to assume that they have the same entitlements as your other staff, on a pro rata basis according to the time they have worked.
What is the notice period for a zero-hours worker?
As the employment term for a zero-hours worker feels different to that of a full-time worker, most employers feel as though their notice period too should differ from that of a regular employee. Because zero-hours workers have the exact same rights as any other employee, this is not the case.
A zero-hours worker is entitled to the exact same amount of notice as any other employee. If a notice period is defined in their contract, then they will have as long is as written. If it isn’t in their contract, they are entitled to a statutory notice period:
Instant on both sides if they have been working for you for under one month.
One week for each completed year of service.
Do remember that this is also the notice period allowed for each employee. If you just have a verbal contract with your employee, statutory notice period is also applicable.
Can I just fire them?
No – you can never “just fire” any employee. As an employer, you have a duty to make sure that you follow a fair and legal process when dealing with any employee.
The easiest employees to dismiss are those under two years. If an employee has been working for you for under two years, then they are not protected from unfair dismissal.
This doesn’t mean that they have no rights – but it does mean that if they don’t have any protected characteristics (age, race, gender, gender reassignment, pregnancy & maternity, marriage & civil partnership, disability, belief, sexual orientation) then you can dismiss them easily.
If they do have a protected characteristic, then you need to make sure that you jump through all the paperwork “hoops”. You can, for example, fire a pregnant zero hours worker. You will however need full documentation to prove that it is due to performance, and not due to the pregnancy that they are being dismissed.
We would always recommend checking about firing a zero hours worker with an HR professional, mainly because any employee can start a tribunal free of charge. And if they accuse you of discrimination, you will need to prove you are innocent. They will not have to prove you are guilty. The financial award if you lose a tribunal case for discrimination is unlimited (over £2 million in the 2022 case Macken v BNP Paribas).
If a zero hours worker has worked for you for over two years, then you have to follow the same processes as you would for a full time or part time worker. After the two-year mark, all zero hours workers are protected from unfair dismissal. This means that you have to follow a disciplinary process, a restructuring process or do a settlement agreement if you want to part company with them.
Do they need holiday pay?
Yes! All employees earn holiday pay. It is also important to remember that part time employees cannot be discriminated against, which means that you cannot give them less holiday (pro rata) than full time workers.
The reason for this is that the majority of zero hours workers (who are all deemed to be part time workers) are either female, carers, young or non-British workers. All of which are protected characteristics.
A full-time employee’s statutory minimum holiday entitlement in any year is 28 days which can include bank holidays.
The normal bank holiday entitlement is eight days a year.
A zero hours employee is entitled to a pro rata entitlement of the full time holiday, based on the number of hours they have worked in that week/month/year.
If, for example, they worked an average of 20 hours a week over the year, then they would be entitled to 14 days holiday in the year. Holiday is “paid time off”.
There is an advantage to zero hours workers though – you can pay out the holiday entitlement monthly without “losing” their normal working hours for you. They are simply deemed to be on holiday during the hours they are not working for you.
To calculate the holiday pay for zero hours workers, you have to calculate it using average hours worked over 52 weeks, rather than, as it was previously, 12 weeks or even worse, multiplying working hours by 12.07%.
Weeks are not included in the calculation if they are:
- annual leave
- sickness absence
- nil earnings, or
- statutory payments such as paternity pay.
If zero hours workers have been with you for longer than 52 weeks, but there are weeks with nil earnings, you are expected to go back up to a maximum of 104 weeks to find your 52 weeks of pay reference period.
For new zero hours employees who haven’t worked 52 weeks, you should base your holiday pay calculations on the number of pay weeks that are available.
Collect the data on a weekly basis and make sure you are recording all overtime worked (it also must be included in this calculation).
The ACAS website contains useful information about zero-hours workers: view it here.
Still unsure about zero-hours workers? Fill out the contact form below if you have any questions: