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Zero hour contracts

Hi, after what amount of time would a zero hours contract become a permanent contract? What ongoing criteria would the zero hours contract have to have to become a permanent contract? Many thanks in advance, Julie

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  • Hi Julie

    To tackle this question, think you need to try to negotiate the legal minefield that regulates ‘zero hours contracts’ (which to start with is a very loose and ill-dedfined and imprecise concept or term in employment law.)

    Through this minefield, you’ll be travelling with the various legal rules that differentiate workers ( both for an agency and directly engaged by their clients) from employees; agency workers on hire from a third party from direct employees of the second party and rules which protect part time workers from less-favourable treatment than full time ones, along with rules that give long term agency workers on hire the right to equal pay, holidays etc with direct employees of the hirer.

    So, the simple answer to your question is that there isn’t necessarily any amount of time that matters in this regard. But a full answer requires detailed consideration of all the topics of employment law that I mentioned above, which would take many thousands of words.

    On the matter of zero hours contracts, two of the main legal considerations are worker v employee status and those on ‘umbrella’ contracts v those on a series of separate and finite ones. This I always think is a sound exposition of the latter topic:
    (Oh dear, can’t paste the link but will do immediately after this post)

    All I can suggest is that you explore these various topics and links via google and the internet, then come back if there is any particular scenario that you need advice about.
  • To slightly expand on David's answer...

    To start with, the transition is not from "zero hours contract" to "permanent contract". It is a transition from a contract with no mutualty of obligation to one where mutuality exists.

    As a result, the point at which one should become the other is the point at which mutuality has been established between the employer and the worker. The challenege is that, often, neither employee nor worker knows whether this has happened until someone thinks that it has and decides that a judge is required to be sure.

    Good practice will mean examining the working conditions of zero-hours workers regularly - I recommend at least every three months - to determine whether the parties are still in a position of no mutuality of obligation. It's good to set criteria (a bit like sickness absence trigger points) at which a worker needs closer scrutiny, but might not necessarily have become (or want to become) an employee.

    In a previous role, we based it on the average number of hours worked per month over the previous six months, with a threshhold of 35 for closer examination.
  • In reply to Robey:

    Exactly - it’s primarily existence or otherwise of ‘mutuality of obligation’ that determines whether or not an employer / employee relationship exists at all.
  • In reply to Robey:

    We cast an eye over our cover staff (as we call them) once a month when we run the payroll. If we see a hefty amount of hours going through for a second month in a row or what looks like a regular pattern forming, we ask for further information.