Zero hours contracts for NHS staff explained

Money Talk by David von Hagen
Partner, Winckworth Sherwood

image captionMidwives are among those that could move to zero hours contracts

The use of "zero hours" contracts has caused a great deal of controversy, particularly for highly skilled professional staff in organisations such as NHS trusts.

The proposals are that midwives, cardiologists, anaesthetists, psychiatrists and other trained health professionals are put on zero hours contracts, rather than ordinary employment contracts.

There are deep concerns that putting critical, life or death, professional staff on zero hours contracts is managing the delivery of highly skilled medical treatment in the same way as fast-food burger restaurants or contract cleaning agencies.

So what is a zero hours contract?

Perhaps the best way of understanding this type of contract is to compare it to an ordinary employment contract.

An ordinary employment contract is an agreement between an employer and an employee. There are certain core terms of employment that are critical to the relationship.

For example, the employee has to turn up for work, the employer has to provide work, and the employee must work a set number of hours, normally about 40 hours per week, with a one-hour break for lunch.

In legal terms there is a mutuality of obligation. The employee has to turn up to work, and the employer has to reciprocate by providing work.

An ordinary employment contract gives the employee security that he or she will get work and get paid for 40 hours per week. It gives the employer the security of knowing that the employee is there to do the work. It also creates an employment relationship which gives the employee quite extensive employment rights under employment legislation, such as the right to maternity leave.

Zero hours contracts remove all this.

The aim of zero hours contracts, which are sometimes known as casual contracts, is not to contract with, and pay, individuals to work a set number of hours per week, but to use and to pay individuals only as and when required.

Cost efficient?

The individual may work zero hours because the employer may have no use for the individual on a certain day or week. In this case, the individual is paid nothing.

image captionDavid von Hagen says that there are critical specifics to zero hours contracts

In a zero hours scenario, if cardiology is having a quiet day, the cardiologist might be asked to spend the day at home, unpaid, watching television or doing the gardening, rather than being paid by his or her NHS Trust for tidying the desk.

Is this not cost efficient, using skills and paying for them only when needed? Perhaps, but the mutual security of an ordinary employment contract disappears.

The individual's guaranteed 40-hour week is gone. He or she is only paid for the hours actually worked. Also, the employer's guaranteed access to the individual is gone - as they do not even have to turn up to work.

So critically, the employer's guaranteed ability to deliver the work disappears because the individual is not obliged to work. The employer cannot guarantee that the individual will do the work. This is why zero hours contracts normally go hand-in-hand with "banks" of employees, so that if one individual says no, there will always be someone else on hand to say yes.

The ability to deliver the work on the part of the employer disappears because the critical difference between an ordinary employment contract and a zero hours contract is the legal concept mentioned earlier of "mutuality of obligation". An ordinary employment contract has it, a zero hours contract does not.


Zero hours contracts became popular in the late 1980s and 1990s, and are inextricably linked with low-paid jobs, a lack of employment rights and only being paid for the work you actually do. At the height of privatisation and contracting out, zero hours contracts were seen as a model of flexibility and cost-saving.

However, zero hours contracts have rarely been used for highly skilled white collar staff. They are normally restricted to low-skilled jobs, such as catering, cleaning and security.

If a fast-food restaurant is having a quiet Sunday afternoon, why pay the individuals for not working? It is a waste of money. They can be sent home or to a rest room. This might leave the employer a bit short-staffed, but if someone has to wait four minutes longer for a burger and fries, no-one gets hurt.

The issue is whether you can apply the same line of thinking and working practice to more highly-skilled jobs, where it actually could be a matter of life or death, as opposed to a longer wait for lunch.

image captionTraditional contracts have tended to be used for white collar staff

The other area of concern about zero hours contracts is the intention that individuals working under them are not meant to be employees. Employees have rights, lots of them.

Maternity rights, the right not to be unfairly dismissed, the right to a redundancy payment and so on, all exist. These, along with lots of others, are all rights exclusive to employees.

Organisations using zero hours contracts want cheapness and flexibility. Therefore, zero hours contracts are frequently drafted specifically to avoid creating any kind of employment relationship. The last thing an organisation wanting absolute flexibility needs is employment rights, employment claims, maternity leave and so on.

The question is whether the mutual flexibility and lack of security of zero hours contracts, which might work perfectly well with sectors such as cleaning and catering, will work in highly skilled, time-critical and life critical situations.

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