The House of Commons recently published a note relating to zero-hours contracts, which underlined that while it was unclear to what extent they were being used, estimates had put the number at just over 1,000,000 by the end of 2013 increasing to 1,400,000 last month. The Higher Education Statistics Agency does not collect data on zero-hours contracts as such, but its figures for 2012/13 indicate that there are approximately 110,000 staff, both academic and non-academic, employed on such contracts.

Opinion on the use of zero-hours contracts is mixed, but they are prevalent in the HE and FE sectors. The House of Commons note does not set out guidance on whether the contracts should be regulated or banned. However, there is likely to be an employer led code of practice following the consultation which closed on 13 March 2014.

What is a zero-hours contract?

In general, a contract is one where an employee has no set hours but is paid for the time when he or she is actually at work. This is easy to assess for teaching hours but less clear for other hours worked in order to deliver the teaching. Zero-hours can also, however, refer to a contract for services which offers no continuity of service between short term employment assignments such as termly teaching contracts. This second type of contract is also common within the higher and further education sphere. In either case the main similarity is that the employer need not provide any work at all to the individual at any time and as such allows the employer the benefit of a flexible workforce.

Traditionally this is thought to be key in certain industries such as hospitality and retail, as well as health and social care, due to the needs of the businesses fluctuating throughout the year. However, zero-hours contracts are clearly used within education both in order to offer academics flexibility, but also to provide a bank of "sessional" staff to cover courses where student demand may be short term or fluctuate.

Key issues

The legal and practical issues are however challenging. Each contract needs to be considered itself, and separately reviewed to determine whether the individuals are:

  • Employees or workers - Employees on zero-hours contracts will have employment rights, as will workers at least for the duration of each teaching assignment. Most employers accept individuals are employed when they are actually working, but consideration needs to be given to whether there is a contract during the period when the individual is not working. In practice this means institutions need to consider how the contracts are implemented, particularly where there may be regular periods of work over time.

  • Holiday - Working out statutory holiday for zero-hours workers with unpredictable, and potentially irregular hours must still be done. A week's pay under the Working Time Regulations is an average of the amounts paid over the previous 12 working weeks.

  • Pensions - This is a recent issue and it has arisen in relation to the obligation to enrol eligible job holders into a pension scheme. Zero-hours workers with variable earnings and whose pay dates do not coincide with pay reference periods must still be assessed for the purposes of auto enrolment and this is clearly causing a headache for a number of higher and further education institutions, as well as for the payroll departments trying to process these contracts.

  • Discrimination - If zero-hours workers are not given the same level of benefits (health care, pay progression, promotion, etc) as full time employees care needs to be taken to ensure that any less favourable treatment can be justified. It is quite probable that zero-hours workers are part time employees and also have the protection of the Part Time Workers (Prevention of Less Favourable Treatment) regulations. This risk can be minimised if the worker cannot identify a comparator employed on the same type of contract. For example, a zero-hours worker who can refuse work assignments cannot compare themselves to a full time worker who is required to work a fixed number of hours with no option to refuse work. But there are institutions where the same broad rights exist for both full time positions and those which are providing the same services on a zero-hours basis.

Given the forthcoming election it is likely that some change to the regulations surrounding zero-hours contracts will be made. As such organisations using zero-hours contracts are advised to keep such arrangements under review, particularly about how they offer hours, and whether workers are genuinely free to refuse. Care also needs to be taken with respect to pay progression and promotion to ensure that zero-hours workers who are comparable are not treated less favourably with regards to opportunities for promotion or increased seniority.

Provided institutions give their staff notice of the hours worked, genuine flexibility about what courses and work are undertaken, and use the contracts transparently, zero-hours contracts are however very unlikely to be banned whatever the political persuasion of the next Government.