17.10.2017

Casual Contracts -v- Zero Hours Contracts - Are They The Same and Which is Correct?

The terms "casual contract" and "zero hours contract" are often used interchangeably by employers and there is a large degree of crossover between the two types of contract. However there is a subtle but very important difference between the two in relation to “mutuality of obligation” between the parties.

Under a casual contract, there is commonly no obligation on the employer to offer work to the individual and, crucially, no obligation on the individual to accept work that is offered. The intention behind this is often that mutuality of obligation does not arise and, therefore, the individual does not have employee status. However, if it can be demonstrated that, over a sustained period, an individual has accepted all the work offered, even if he or she has the contractual right to refuse it, there is a significant risk that, in the event of a claim, the tribunal will take a pragmatic view of the arrangement and find that mutuality of obligation exists and an employment relationship has been established under an overarching or "umbrella" contract.

A zero hours contract will typically (but not necessarily) differ from a standard casual worker agreement in that, while the employer is under no obligation to offer work, the individual is usually obliged to be available and to accept the work when it is offered. Employers who engage a number of "bank" staff often engage those staff under this type of contract. Tribunals and courts may, in certain circumstances, interpret this type of arrangement as being sufficient to fulfil the requirement of mutuality of obligation for an employment relationship to arise.

Therefore it is key to ensure that employers identify the true situation that they are attempting to staff and then employ people correctly on the appropriate style of contract. If you have casual employees, contact Richard on 07850 208701 to discuss your current situation to ensure that you are employee staff in the most appropriate manner.

A mature HR professional with over thirty years experience within the HR function both from a strategic and operational perspective, with over 18 years in senior management roles including those at…

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