Zero Hour Worker Contract

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Overview

Employment contracts or employment agreements are meant to provide extra protection towards your business and help you avoid future disputes. By securing your recruits through an employment contract, you can formalize the arrangements made with your employees. Such contracts can also contribute towards fostering a positive and professional working relationship between the management and the employees. There are many types of employment contracts, designed for hiring different types of employees in different situations. Here, we will discuss everything you wanted to know about one of them, namely, the zero hours employment contracts.

What is a zero-hours contract?

A zero hour worker or a zero hour employee is one who is not entitled to get a guarantee from his employer regarding the minimum number of work per hour.

A zero hour contract is a casual contract between an individual and a business where the individual agrees to work for the business. Under such an agreement, the business is not obliged to guarantee the worker any set hours of work. In some of these contracts, the individual is termed as an “employee” and on some others, he/she is termed as a “Worker”.

These days, the zero hour contract work has become a preferred choice for companies when they want to shed costs or do not want to hire permanent/fixed term employees. Companies enter into zero hours employment contracts with employees and while offering employment, document the terms of employment applicable to them. A zero hour contract work includes terms related to employment status, place of work, compensation and so on. It also contains the obligations and rights of both the employee and the employer and other important terms related to non-disclosure of trade secrets, confidentiality clause, and timely payment and so on. A zero hour contract helps companies ensure clarity and effective resolution of disputes in the future. Such a contract also provides a zero hour employee with an incentive for considering freelancing or self-employment as a viable career option.

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What are the benefits of a zero hour worker contract?

Here, we will discuss zero hour contract advantages and disadvantages-

  • Zero hours employment contracts are suitable where there is an unpredictability in the workflow. Due to changing demands and unpredictability in staffing levels, such contracts are used extensively in creative and retail industries to engage freelance talents.
  • Such a contract is useful to hire workers in ‘per project contract’. This helps the companies to deal with specific skill requirements and ups and downs attached to individual projects. For example, engaging zero hour employees will be useful in catering, hospitality and leisure sectors to cover for seasonal work, special events and busy period demands ( such as Christmas shopping, etc.)
  • zero hours employment contracts are suitable while starting a new business or entering a new market. In such a situation, a business is often unsure of its performance in the near future and can’t figure out its precise employee strength to ensure smooth operations.
  • A zero hour contract provides tremendous flexibility to professional employees. It allows them to serve different employers, instead of just one. Working in different projects also allows them to acquire new skills on the job and stay updated with market demands.
  • With all the terms and conditions of the employment in written form, a zero hour contract keeps the expectations of the zero hour employees at check. They come to understand the boundaries of their responsibilities and entitlements well in advance and this, in turn, helps the management to manage the working relationship with these employees.
  • Such a contract is useful when an employer wants to have an expert staff to cover for a permanent employee who is not available due to sickness or other exigencies.
  • One disadvantage of a zero hour contract is that it cannot bind the workers by adding an exclusivity clause. The employer cannot prevent a zero hour employee from working for another business. Such an employee need not even ask the permission of the employer before doing so.

    What should a zero hour worker contract include? ( A checklist)

    In general, a zero hour contract should include the following things-

    1. Job title and position- The job title and position for which the zero hour employee is hired should be clearly mentioned in the contract

    2. Duties & responsibilities- The contract should define the duties & responsibilities of the employee in no uncertain terms.

    3. Working days & hours- The normal working days and hours pertaining to the zero hour employee must be mentioned in the contract. Usually, the working hours adhere to the Shops & Establishment Act

    4. Salary or wages- The salary/wage to be paid to the zero hour employees should be mentioned clearly in the agreement. It may contain the hourly rate on normal days and also on holidays if there is any.

    5. Termination of employment- It is important even for a zero hour contract to have a termination clause. The terms and grounds on which the employee can be terminated should be mentioned clearly in the contract. Employee termination comes under the purview of several employment laws in India which specify that zero hour workers also have the right to protect themselves from unfair dismissal.

    6. Confidentiality and non-disclosure- If the responsibilities and the duties of the worker put him in such a position where he comes to be aware of certain confidential information and/or trade secrets, it’s important for the contract to have an appropriate confidentiality & non-disclosure clause. In the event of more specialized employment that involves extensive disclosure of highly confidential business information to the employee, he may be asked to sign a separate non-disclosure agreement as well.

    7. General terms & conditions- These may include the obligations and rights of both the employee and the employer, penalty conditions and so on.

    How to enter into a zero hour worker contract?

    In most cases, the zero hour workers go into an agreement with the employer as soon as they start working for him, irrespective of whether the contract is in written form or not. Just because you have not entered into a contract with the worker, it does not mean that you can avoid paying him. However, it’s desirable that you enter into the agreement with your zero hour workers as soon as possible. It will provide them a much-needed written statement regarding the terms and conditions at the very beginning of their employment with you.

    Please consider the following points while entering into an employment contract with your zero hour workers-

  • Zero hour workers are entitled to receive statutory annual leaves as prescribed by the relevant Indian laws
  • There will be limitations of engaging zero hour workers in certain manufacturing processes
  • You need to maintain complete records of your zero hour workers as well
  • The zero hour workers, under no circumstances, can claim for any permanent employment.
  • Zero hour contract notice period- Such a worker has no statutory right to avail notice periods. But, it is a good practice to give a notice period to them, even though you are not legally bound to do so.
  • FAQs on Zero Hour Worker Contract

    Is an employer legally bound to enter into a written employment contract with his zero hour workers?

    No, he is not. However, it is a good idea to have a written employment contract with his zero hour workers. Such a contract helps the employer to ensure clarity and avail a safeguard in case of a possible dispute in the future.

    I am intending to engage some non-permanent workers for my business. Should I go for contractual or zero hour workers?

    Well, it depends. In most cases, it is better to engage contractual employees. As they are usually engaged through registered manpower agencies, they will be more reliable and their responsibility will be shared.

    Can a zero hour worker be given notice periods?

    Zero hour workers have no statutory rights to avail notice periods. But, it is a good practice to give a notice period to them, even though you are not legally bound to do so.

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