Dive into the world of PAYE investigations. Uncover the facts, implications, and insights in this informative blog
The use of zero-hour contracts is used in many sectors including the food service, retail, healthcare and leisure sectors.
For employers, zero-hour contracts offer many advantages such as that the employer does not have to guarantee any hours of work and can offer workers changeable working hours at short notice. The workers may or may not be required to accept any work that is offered depending on the terms of the contract.
On the other side, for many employees there is great insecurity with these contracts, and they are often at the beck and call of their employers. The employees do not have any certainty on the minimum number of hours they will be able to work each week. Apart from not knowing how much they are going to earn on a week-by-week basis, some employees on zero-hours contracts also find it difficult to obtain financing due to not having a guaranteed income.
The issue of these contracts has been heavily politicised for some time and the Government has been under pressure to act. There have even been calls for the UK to follow countries such as New Zealand which overwhelmingly voted to ban zero-hours contracts back in 2016. These issues have caused a rethink on the use of zero-hours contracts and some employers no longer offer this type of employment.
What Rights Do Employees Have?
By law, someone working under a zero-hours contract, has the right to:
- National Minimum Wage and National Living Wage;
- Paid holiday;
- Pay for work-related travel;
- Pay for being on call.
Employers cannot do anything to stop a zero-hours worker from getting work elsewhere. The law says they can ignore a clause in their contract if it bans them from:
- Looking for work; or
- Accepting work from another employer.
Calculating Holiday Entitlement
Almost all full-time workers in the UK are legally entitled to 5.6 weeks' (or 28 days) paid holiday per year. This is known as their statutory leave entitlement or annual leave. Legally, employers can include bank holidays in this total although not all employers do this. Employers are also free to provide additional non statutory holiday entitlement.
An employee’s actual statutory entitlement depends on how many hours / days they work per week. Part-time workers are entitled to a pro-rata entitlement. For example, 5.6 days holiday per year if they work one day a week.
This includes workers with irregular hours or zero-hours contracts. For casual workers with no normal hours, including workers on a zero-hours contract, the holiday pay they receive will be their average pay over the previous 52 weeks worked. As these workers do not work set hours, holiday pay would usually be calculated based on hours (rather than days) worked.
Any employee that has a problem with their holiday pay should try and resolve the issue with their employer. If this does not work, there are a number of ways to resolve the dispute including contacting ACAS or taking their employer to an employment tribunal.
The 'furlough' scheme is currently in place until 30 September 2021. Workers on any type of a contract including zero-hours are eligible to use the scheme (once they meet the other scheme requirements).