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The usual employment “deal” is that the employer provides work and the employee does it.  There is an obligation on both parties.  In a zero hours contract (sometimes known in the UK as a nil hours contract) the employer provides work when it has it and the employee is obliged to do it.  But if there is no work then the employee stays at home (and isn’t paid).

For some employees this works well, for example for students and retired people who do not depend on an income but appreciate some cash when it comes.  These contracts are often used for weekend work in catering and retail and their use has increased during recessionary years. Others see this type of contract as exploitation since the employment deal is unbalanced: the employee has to be available for work but the employer does not have to provide it.

Years ago Burger King came under fire for using similar contracts (though in their case non-working employees remained on the premises) and now (August 2012) MacDonalds is under fire too.

These contracts are however (again in August 2012) still lawful and where the bargain properly suits employer and employee; we submit that they are ethical. If they were not so then we would all either have to pay more for our beer and burgers or there would be less employment.

A few points to note for those using or considering using them:

  • The contract is still employment, not a worker contract.
  • Therefore there is continuity of employment for as long as the contract remains in force (even if there is no work). This means employees accrue rights, such as unfair dismissal rights, in the normal way.
  • Also statutory holiday leave (5.6 weeks per year) accrues during the contract; holiday pay should be based on the average weekly earnings of the previous 12 weeks.
  • The 48 hour limit applies, although usually this will not be of concern unless the employees in question have other work.
  • Nil hours contracts are generally of interest to those who do not want full time work

Will MacDonalds abandon these contracts? I’d be surprised, but watch the space!