Zero Hours and Casual Contracts of Employment
The difference between zero hours and casual contracts of employment is one of the most confusing issues facing employers.
The terms ‘zero hours’ and ‘casual’ contracts of employment are often used interchangeably by employers and, indeed, there is a lot of overlap between the two. To complicate matters further, there is no legal definition of what constitutes a zero hours contract, aside from the unenforceability of exclusivity terms (preventing individuals engaged under a zero hours or casual contract from working for another organisation), which apply with both types of contract. Essentially, then, zero hours and casual contracts are agreements between two parties where one party may be asked to perform work for another but there are no minimum contracted hours: an ‘as and when’ contract. These contracts are particularly common with seasonal work or where the requirement for workers is unpredictable.
The contract will state what pay the individual will receive if they carry out work and whether or not he or she can turn down work if it is offered. This latter point is crucial because if the contract states that there is no obligation on the employer to offer work to the individual and no obligation on the individual to accept work that is offered, this should mean that one of the key factors in creating an employment relationship - mutuality of obligation - does not apply.
In the Simply-Docs suite of employment contracts, a Casual Work Contract is defined as one where the employer has no obligation to offer work to an individual and the individual is not required to accept the work when it is offered. For situations where the employer is under no obligation to offer an employee work but, when it does, the employee is required to accept the offer, the Zero Hours Contract should be used instead.
It is very important that employers use the correct contract to suit their particular circumstances and employers, as a matter of good practice, should regularly review the contracts used in such ‘as and when’ arrangements to ensure that the contracts continue to reflect the reality of the working relationship.
The contents of this Newsletter are for reference purposes only and do not constitute legal advice. Independent legal advice should be sought in relation to any specific legal matter.