For many employers, it is attractive to offer employees a contract without fixed working hours. In this situation, there is a choice between three forms of on-call contracts: an on-call contract with preliminary agreement, a min-max contract and the zero-hours contract. This blog will discuss the latter variant. Namely, what does a zero-hours contract mean for both employer and employee and what rights and obligations flow from it?
What is a zero-hours contract
With a zero-hours contract, the employee is employed by the employer through an employment contract, but has no fixed working hours. The employer is free to call up the employee whenever needed. Due to the flexible nature of a zero-hours contract, the rights and obligations differ from a normal employment contract (for (un)fixed term).
Rights and obligations
The employee is obliged to come to work when called by the employer. On the other hand, the employer is obliged to give the employee at least 4 days’ notice in writing. Does the employer call the employee within a shorter period? Then he does not have to respond to it.
A similar deadline applies when the employer has called the employee, but this is no longer necessary. In that situation, the employer must therefore cancel the employee 4 days in advance. If he does not comply with this deadline (and he cancels the employee 3 days in advance, for example), he is obliged to pay wages for the hours that were scheduled for the employee.
Also important is the duration of the call. If the employee is called for less than 3 hours at a time, he is entitled to at least 3 hours’ pay. For this reason, never call your on-call employee for less than 3 hours.
Predictable work pattern
From 1 August 2022, workers on zero-hours contracts will have more rights. When the employee has been employed for 26 weeks (6 months) under a zero-hours contract, he may submit a request to the employer for predictable hours. In a company with <10 employees, he must respond to this request in writing within 3 months. In a company with >10 employees, he must respond within 1 month. If there is no response, the request is automatically accepted.
When an employee on a zero-hours contract has been employed for at least 12 months, the employer is obliged to make the employee an offer of a fixed number of hours. This offer must be (at least) equivalent to the average number of hours worked that year.
The employee is not obliged to accept this offer, and can also choose to keep his zero-hours contract. If the employee does so, and is then employed for another year on a zero-hours contract, you are again obliged to make an offer.
Also during illness, the employee on a zero-hours contract has certain rights. If the employee falls ill during a period where he is on call, he will receive at least 70% of the salary for the agreed call period (if this is lower than minimum wage, he will receive the legal minimum wage).
Does the employee on a zero-hours contract remain ill when the call-up period is over? Then he is no longer entitled to wages. Does the employer then no longer call him up even though he has been employed for at least 3 months? Then he sometimes still retains the right to wages. This may be the case, for example, due to the existence of an on-call obligation that follows from the assumption that a fixed work pattern has been established.
Termination of zero-hours contract
The employer cannot terminate the zero-hours contract just by not calling the employee anymore. This is because the contract simply continues to exist this way. As an employer, you can only terminate the contract by operation of law (because the fixed-term employment contract has expired) or by proper notice or dissolution. This can be done by mutual consent dismissal through a settlement agreement, for example.
When the employer enters into a zero-hours contract with the same employee for a fixed period each time, and enters into a new fixed-term contract after the termination of this contract, it runs the risk of the chain-of-contract rules coming into play.
In case of 3 consecutive contracts, where the intervals (period where employee has no contract) are less than 6 months each time, the last contract (the third), is automatically converted into an open-ended contract (with no end date).
The chain rule also applies when more than 1 contract has been entered into with the employee at intervals of up to 6 months, and the duration of these contracts exceeds 24 months (2 years). The last contract is then also automatically converted to an open-ended contract.
As you can see, on the one hand, a zero-hours contract is a convenient and nice way for employers to let employees work flexibly, but on the other hand, there are many rules attached to it. In addition, for the employee, there are few advantages to a zero-hours contract.
After reading this blog, do you still have questions about zero-hours contracts or other forms of on-call contracts? If so, please contact us. Our employment lawyers will be happy to help you further.