The latest Clay Shaw Butler Money Matters column from the Carmarthenshire Herald

The latest Clay Shaw Butler Money Matters column from the Carmarthenshire Herald.
By Mark Jones, director of Carmarthen-based Clay Shaw Butler chartered accountants and business consultants.

In last week’s Money Matters column, we took a look at some of the positive aspects to zero hours contracts and how they can he used properly.
This week, we flip the coin and examine some inappropriate uses of zero hours contracts.
Zero hours contracts allow flexibility for both employers and individuals.
However, they should not be considered as an alternative to proper business planning and should not be used as a permanent arrangement if it is not justifiable.
Zero hours contracts might not be appropriate if the job offered will mean the individual will work regular hours over a continuous period of time.
For example, if an individual is asked to work from 9am to 1pm, Monday to Wednesday for a 12 month period, it may be more appropriate to offer that worker a permanent part time contract or even a fixed term contract.
Zero hours contracts do not allow employers to avoid their responsibilities.
All staff, regardless of their contract, are entitled to employment rights and should be treated fairly and within the law.
Zero hours contracts are rarely appropriate to run the core business, but might be useful for unexpected or irregular events such as bereavement leave by staff, to deliver sufficient customer service during peaks in demand, or when preparing to open a new store.
Many businesses provide a regular service or product and have a broadly predictable timetable or output and so permanent or fixed hour contracts can be more appropriate.
Employers should consider whether a zero hours contract is the best type of contract for their business need depending on the nature of the work to be offered and the specific circumstances.
Depending on the business need, alternatives might include:

• offering overtime to permanent staff to ensure experienced staff deal with temporary fluctuations in demand 
• recruiting a part time employee or someone on a fixed term contract if regular hours need to be worked to adapt to a change in the business needs 
• offering annualised hours contracts if peaks in demand are known across a year 
• using agency staff can be a quicker and easier way to hire someone if staff are needed temporarily or at short notice 

Here is a guide to best practice for zero hours contracts -
Contracts should be clear and transparent so the individual can understand their rights and what the implications of such a contract means to them.
When offering a zero hours contract, employers should consider including information such as:

• whether the individual is an employee or worker and what employment rights they are entitled to 
• if the individual is an employee, how statutory employment entitlements will be accrued where appropriate, for example, redundancy pay 
• the process by which work will be offered and assurance that they are not obliged to accept work on every occasion if they so wish 
• how the individual’s contract will be brought to an end, for example, at the end of each work task or with notice given by either party 

Employers should plan ahead and give as much notice as possible when offering work.
Those who work on a zero hours contract may have caring responsibilities or have studies and may need to plan for childcare or around exams.
Employers should be transparent about how they offer work, for example, is there a rota?
Cancelling work at late notice, or when the individual turns up at the place of work, is unacceptable unless truly unavoidable.
Employers should consider putting into place a policy explaining the circumstances when and how work might be cancelled, and how they try to avoid this, and whether the individual can expect any compensation for caring costs they may have incurred.
When recruiting for a zero hours contract, the job should be clearly advertised as such and the individual should be clear that hours are not guaranteed, and that work may cease if there is a fall in demand.
Employers should ensure they familiarise themselves with their responsibilities when employing someone on a zero hours contract. Employers must comply with every aspect of the law, including employment law.
Those who take up work on a zero hours contract are often students, partially retired, or have caring commitments. As an employer you should respect the needs of those individuals to arrange care and be flexible in whether they can accept work at short notice or if they cannot arrange suitable care.

You can find out more about money matters on the Clay Shaw Butler website (under our news for business section) -
http://www.clayshawbutler.com/news/latest-news-for-business
We have a strong and experienced team with great local knowledge all geared-up to helping you get the very best from your finances – whether that is as an individual or as a business.
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