Flexible alternatives to zero hours contracts

Published Sep 18, 2023

Over recent years zero hours contracts have received considerable negative coverage in the media however this option can bring benefits to workers that need flexibility such as students and individuals with multiple employers.

Whilst this flexibility can bring benefits to employers and workers alike and enable them to offer and accept work assignments there is still a requirement for organisations to operate ethically. This includes ensuring that all workers have a voice and that there is fairness with the organisation.

Here we will consider alternative and flexible approaches to engaging workers.

Banked hours
One option is banked hours. This is where the employer creates a “bank” of hours from which they plan for the number of workers and hours they require per month.

Shifts then flex week by week to meet the needs of the business but employees receives a regular income - unlike the inconsistency from zero hour contracts.

An example could be an organisation that needs workers covering two to three days a week. The workers would be given a contract for 2.5 days per week. The days of work would be unspecified as the organisational needs will vary from week to week. But it gives the individual a more reliable income.

Annualised hours
Annualised hours is where an employee works a certain number of pre-planned hours over a year.

Employee attendance is planned around the requirements of the organisation. Where there is a need for longer or shorter shifts due to peaks and troughs in demand, the organisation will adjust working hours accordingly. Similarly the system can work for seasonal demand where the volume of workers needed has predictable peaks such as either during school holidays or in the run up to Christmas where the demand for labour increases. The employee would receive the same monthly wage throughout the year which gives them certainty around income.

Employers should still schedule regular work patterns with advance planning for attendance and time off. Usually a set number of hours are set aside to overcome short term but urgent situations such as covering for sickness and preventing a need to bring in agency workers.

The employer has the option of “writing off” any unworked hours. This potential outcome is used by some organisations as a way of boosting productivity, reducing absence and driving more efficient working practices.

Critically employers will need rule sets and procedures for how these two highly flexible approaches will be implemented and managed.

It is best to involve the workforce in producing these procedures so there is agreement on areas such as the notice periods for changes to planned hours.