Opinion: ‘Zero-hours' contracts are cause for concern, says employment lawyer Paula Whelan

Growing use of ‘zero-hours' contracts in the restaurant and leisure sector is cause for concern for both employers and employees, particularly as the summer season gets underway, and the use of such contracts needs urgent clarification.

As the busy summer season calls for more staff to manage increased outdoor capacity, pubs and restaurant businesses throughout the UK are adopting ‘zero-hours' employment contracts to ensure they have sufficient staff on their books to meet demand. While beneficial for employers, these flexible working arrangements also appeal to young workers, such as students, and older workers looking to supplement their incomes.

However, concerns raised recently about how such contracts are used have led to Vince Cable announcing plans to review zero-hours contracts in the near future.

Although ‘zero-hours' contracts suit many employment situations there is often an ambiguity around what these types of contracts actually mean for the employer and employees, and Vince Cable is aiming to clarify matters.

Concerns about ‘zero-hours' contracts stem from having workers on ‘standby' to cover busy trading periods, which may make the system susceptible to abuse. For example, if the same few employees are used each time to cover the additional shifts, the system is no longer fair to everyone and this could potentially leave employers exposed to the risk of a discrimination claim.

To minimise this risk, it may also be wise for employers to clear workers who have refused shifts on more than three occasions from their books and to notify them in advance that this will determine whether they get future work. They should also aim to manage staffing arrangements closely to ensure shifts are rotated appropriately.

‘Zero-hours' contracts are appealing to both workers and employers because of their flexibility. Importantly, they also extend workers with certain employment rights, such as paid holiday and redundancy rights - that do not apply to casual workers

In today's economic climate, it isn't viable for employers to employ all staff on permanent contracts with set hours, and that's why ‘zero-hours' contracts have become more popular. As long as the employer has well-managed systems in place to support this type of contract, there is no reason why they can't work for everyone.

Employers also need to be more proactive about communicating the terms and conditions of such contracts at the outset to ensure employees understand their rights and what is expected of them.

Paula Whelan is an employment law partner at Shakespeares