Zero-hour contracts are covered by contract law and must be entered into freely by the employer and the employee. They cannot be forced upon an employee. Zero-hour contracts are normally found in sectors such as retail, health care and hospitality. I am very conscious that in certain circumstances they may be of great benefit to both employers and employees. They allow greater flexibility for both by reducing the employer's pay costs and allowing workers to decide when and if they want to work. Such contracts may be preferred by employees who require flexibility to facilitate educational or other personal necessities. Banning such contracts could do a disservice to these workers. However, it is a matter I will keep under review.
Section 18 of the Organisation of Working Time Act 1997 contains a specific protection for employees who are employed on zero-hour contracts. The zero-hour protection applies to all employees whose contracts operate to require them to be available regardless of whether they work on a casual basis. It covers situations where, for example, an employee is sent home if things are quiet or is requested to be available for work and is not asked to work on the day. Where an employee suffers a loss by not working hours he or she was requested to work or to be available to work, the zero-hour provisions of the Act ensure he or she is compensated for 25% of the time during which he or she is required to be available, or 15 hours, whichever is the lesser. The level of compensation may be impacted if the employee gets some work. Claims of breaches of section 18 may be referred to a rights commissioner.
An expectation of work does not, however, entitle an employee to compensation. The zero-hour provision does not apply to lay-offs, short time, emergency or exceptional circumstances, employee illness, employee on-call situations or where the employee is paid wages for making him or herself available for work. Section 17 sets out the requirements regarding notification to the employee of the times at which he or she will be required to work during the week. Generally, an employee is entitled to 24 hours' notice of his or her roster.