With the rising cost of living running a small business (or any business) is becoming increasingly more expensive, therefore employing full time staff is often not financially viable.
Seasonal industries such as farming, and tourist town hospitality have traditionally relied upon seasonal labour from European workers, with roughly 60% of these workings coming from the Ukraine and 8% from Russia. The conflict in Ukraine, the delay in work visas being processed following Brexit, and the aftermath of the COVID 19 pandemic, have created a perfect storm and resulted in plummeting numbers in seasonal economic migration from Europe.
Therefore, seasonal industries are now having to rely on a workforce closer to home and employ UK nationals to prop them up during the busiest times of the year. Employers therefore need to consider how this employment will work. We would never advise an employer to take on a member of staff without ratifying the terms of employment in a contract, but what form of contract is best for a seasonal worker?
Casual worker contract
Most people will have heard of the zero hours contract due to the significant coverage that they have had in the media over recent years. Employee representative bodies and trade unions have consistently condemned the increased use of zero hours contracts as a means of abusing vulnerable, low-income workers, providing no job security, rights, or guaranteed income. However, the flip side is that many workers report that they welcome the flexibility a zero hours contract provides.
So, what is a zero hours contract? Essentially it is one type of contract between a business and a casual worker where the worker is engaged on an ad hoc basis with no guarantee of work from the business.
So are zero hours contracts the ‘bogeymen’ of the employment world, or do they have a rightful place?
A benefit of a zero hours contract for the employer is that work can be offered as and when it becomes available, meaning that the employer does not need to give the worker any minimum working hours. This allows for much more flexibility and allows for offers of hours of work to reflect what the actual needs of the business are. Furthermore, an employer will not have to pay the worker for hours that they have not worked.
However, it is worth noting that the downside is that the worker can then turn this work down, as they are not obligated to accept the hours that are offered to them. This could leave an employer with no additional cover at a time when it is most needed, which could be detrimental for a seasonal business.
Under a zero hours contract an employer is not required to pay:
- Redundancy pay
- Pension contributions
- Sick pay
A worker on a Casual worker contract is entitled to:
- Be paid national minimum wage
- Rest breaks during their working hours
- Holidays & holiday pay
- Maternity, paternity and adoption pay but not leave.
Part time employment contract
A part-time contract is similar to a full-time contract, the main difference being the agreed working hours. The actual contract will need to follow the same requirements as a full-time contract in that it will need to provide a statement of the particulars of employment.
A part-time employee will work less than 35 hours per week. The agreed number of hours the employee is required to work each week must be visible in the contract. However, the employer can provide the option for the employee to work overtime. An employee who is employed under the terms of this type of arrangement has all the same employment rights as a full-time employee. These rights and benefits include and are not limited to, pension, holidays, and training.
The benefit of a part time contract is that the employee must work the hours agreed within the contract, therefore meaning that there is certainty for the employer, and they will not be left shorthanded without the employee being in breach of their contract. An employer can also offer overtime for hours over and above the contractual agreement if the business needs require this.
What may be difficult for smaller business employers is that the employee must be paid for those hours that are agreed within the contract; for example, if the employer were to include 8 hours per week as a contractual term, then they would be required to pay the employee for those 8 hours whether they were required or not, and regardless of whether these hours were actually worked. Therefore, there is always a chance that a business may be paying money that they can ill afford to an employee who was not actually required to work a particular week.
Which approach is best?
This is very much dependent on a case-by-case basis and what the business needs of each individual employer are. Each type of contract has their benefits and pitfalls, and each business will need to think carefully about which approach best caters to their needs.
We can discuss the various options available and help you decide what’s best for your business. We can also review or draft contracts of employment or casual worker contracts for you.