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Zero-hours contract: everything you need to know!

An on-call worker is an employee who only works when called upon. There are different types of on-call contracts with different rules. These can include pay if no work is provided, guarantee hours, or a minimum salary for each call.

What is a zero-hours contract?

A zero-hours contract is a standard employment contract for a fixed or indefinite period. The contract establishes an employment relationship between the employer and the employee for a fixed or indefinite period but does not specify the number of hours the employee is required to work. Instead, the zero-hours contract specifies that the employee will be called upon to work when work is available. An employee with such a contract is also known as an on-call worker.

The EU Directive Implementation Act

Since August 1, 2022, a new law has been in place for on-call workers and employees with unpredictable work patterns. On-call contracts are employment contracts in which the employee only works when called upon by the employer, and where the salary is dependent on the number of hours the employee is called upon to work. The existing protections for on-call contracts remain unchanged, but employers are now required to establish reference days. These are the days and times when the employee may be required to work.


Unpredictable work patterns

Employees with a contract that involves an entirely or mostly unpredictable work pattern will receive more protection. Employers must establish reference days, which are the days and times when the employee may be required to work. If the employee is scheduled outside of these days, they are not required to work. Employees must have clarity on the days and times they are required to work at least four days in advance. If the employee is canceled within four days, they are still entitled to pay, as with an on-call agreement.

What are the rights and obligations of an on-call worker?

When the employee is called upon, they must appear at work. The employer only pays wages for the hours the employee works. These arrangements are specified in a zero-hours contract of employment. An on-call worker is considered a regular employee. If the on-call worker is called upon but is sick, they will still be paid. Employers are also required to pay the on-call worker for at least three hours of work, even if they are only needed for one hour. Like a regular employee, an on-call worker receives vacation days and pay. This is calculated based on the number of hours worked and the gross wage. Many employers choose to pay vacation pay directly. This is because an on-call worker is often employed for less than one year and it is simpler for administration purposes.

What should you be aware of?

Many employers hire on-call workers for their flexibility. However, this may change in the future. Below are three scenarios to consider:

Scenario 1

If you call upon an on-call worker for more than 20 hours in a period of three months, they may demand an employment contract. This contract will be for the average number of hours worked in the previous three months. This makes it impossible to call upon the on-call worker for significantly fewer hours, as they have the right to be paid for the average number of hours. However, this rule can be circumvented by including a clause in the contract stating that this rule does not apply for the first six months.

Scenario 2

A zero-hours contract applies only for the first six months. After the first six months, the employee is entitled to sick pay or payment if there is no work available. Only certain roles allow you to deviate from this obligation to continue paying.

Scenario 3

If an on-call worker has been working on a zero-hours contract for more than three years, they can request a permanent contract. However, the employer is not obliged to grant this request.


What is the process for ending a zero-hour contract?

As previously mentioned, a zero-hour contract is considered a standard employment contract, meaning that the employee called upon is treated as a full-fledged member of staff within the company and is therefore covered by the laws of dismissal. You cannot terminate a zero-hour contract simply by not calling the employee to work anymore. If the zero-hour contract is established for a fixed term, it will come to an end on the specified end date. If the zero-hour contract is established for an indefinite term, you must terminate the agreement by following the standard procedures of dismissal laws. Additionally, you must always confirm the dismissal in writing.

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Published on 13 July 2023
Adam Cambridge linkedin
Adam is our English content writer and studies International Business Law at Leiden University

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