Under a zero hours contract employees have to make themselves available for work but they are not guaranteed work; and therefore not paid if it is not available. It is a form of contract which may suit circumstances where there is a fluctuating need for workers at any one time.
It can be distinguished from free-lance work where the worker does not need to be available for work at all times. In free lance work declining work does not break the contract as each piece of work can be regarded as a contract in itself. For a zero-hours employee declining work breaks the contract and it may well not be renewed.
For individuals who need to meet regular outgoings zero-hours can be very insecure, particularly if the flow of work is irregular and unpredictable (which are reasons for this type of contract in the first place). But for those looking for occasional work they can be quite attractive.
It is suggested in the national media that employers use them to avoid employment rights and that they are exploitative. Undoubtedly the brunt of any fluctuation in workload is borne by the employees. Nevertheless, they represent an opportunity to provide employment where otherwise it may be uneconomical.
On the other hand if the intention is to avoid employment rights then take care. Employees are still required to be paid the National Minimum Wage for the hours that they work. Generally “work” includes all time “at the employer’s behest” such as at the workplace. Working Time Regulations apply, they include time spent at the employer’s premises even if sleeping. Most importantly, maternity rights and those rights accrued by continuous employment also apply; rights which do not accrue to free lance workers. Finally, the “psychological contract” should not be overlooked. The level of commitment shown to you by employees is invariably a reflection of the commitment you show to them.
However as an option zero hours contracts should not be written off. They may enable you to respond to needs without incurring costs when the needs are not there. But be aware that the positives may be balanced out by the negatives!
Note: the impact of legislation described here is a general summary because particular requirements can apply in specific situations.