When you are running a business, particularly in the early days, it is often hard to predict the staffing levels that you will need on a day to day basis. Having a flexible team is one way of helping to control costs in leaner times while having available employees to cope with peaks in demand. Having the right contract of employment, or terms within that contract, can help you manage your team to meet the needs of your business.
Zero hours
Receiving bad press of late, the zero hours contract remains a useful tool. There are no obligations for employers to offer work under this contract, nor for the worker to accept work on any given day. Most zero hours contracts will give staff ‘worker’ rather than ’employee’ status, and yet they will be afforded broadly the same rights; annual leave, the National Minimum Wage and National Living Wage and pay for work-related travel in the same way as regular workers.
Using these contracts means you have a bank of accessible staff to accommodate peaks in work, while not over-committing your business to pay wages during leaner times.
Lay-off and short-time
A lay-off clause within an employment contract gives the right to the employer to ask an employee to stay at home or take unpaid leave for at least one day if there’s not enough work until business picks up.
Using a short-time working clause within an employment contract allows the employer to cut hours, for example reducing the length of a working week from five to four days.
Subject to eligibility, employees are entitled to guarantee pay during lay-off or short-time working. The maximum statutory pay is £26.00 a day (or their usual rate where it is lower) for 5 days in any 3-month period – so a total of £130, with part-timer entitlements worked out proportionally.
These clauses can be useful in avoiding redundancies when work requirements slow down.
Fixed Term Appointments
Many employers choose to use fixed term appointment. In order to be compliant with legislation, employers must still issue an employment contract, but the contract ends on a particular date; on completion of a specific task, project or at the time of a specific event. It is worth pointing out here that employers are obliged to ensure that these employees receive the same pay and conditions as permanent staff, equivalent benefits and access to information about permanent vacancies. They also have the same protection against redundancy or dismissal as permanent staff. Finally, as with any employee, if their appointment is extended and reaches 2 years without a break, they are also entitled to redundancy rights.
This type of contract can be useful in limiting employment to a specific factor.
Casual Appointments
The term ‘casual worker’ is not defined in law and there are different understandings about what the term means. The result is confusion about the legal status of the individual, creating a grey area in understanding the obligations of the employer, thereby exposing the employer to an element of risk.
Ultimately the rights and protections available to them in law will be determined by the nature of the working relationship with the employer and how the arrangement operates on a day to day basis.
To afford some protection, employers should set out some form of documentation to confirm the individual’s status as self employed, a worker or an employee – thus clarifying their rights and the employer’s responsibilities.
Success
In order to be successful in managing people under these contracts or terms, keeping the individuals engaged is paramount. During periods of non-work it is easy for individuals to feel isolated, less inclined to accept work when offered, or to fail to deliver to their full potential when working. Getting this right can save you both time and money.
Our advice is clear:
Make sure each individual has clarity on their how their contract works.
Have a transparent process in place to give advance notice on breaks from work.
Agree a time and frequency to contact individuals when work is irregular.
Make sure everyone feels part of the team, particularly when not in work; your value and respect is a huge contributor.
Do you need help deciding on which route to take for your team, or implementing change relating to these options? Get in touch to discuss your needs today.
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