Contracts

In this article we explain the different types of employment contracts.

• What constitutes a contract?
• Zero-hours contracts
• Individual or personal contracts
• Fixed-term contracts

What constitutes a contract?

Employment contracts are legally binding agreements between employers and workers.

The general advice to get it in writing applies equally to everyone whether they are freelance or self–employed, workers, casuals or employees.

If you do not have a written contract you should try and confirm in an email or letter what has been agreed on the telephone, setting out dates, hours of work and rates and make it clear this is what you expect the arrangement to be.

In every case, freelance or employee, you should ask them to come back to you if they disagree with your letter or email.

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Zero-hours contracts

A zero-hours contract is one with no minimum set hours. The employer can call the worker in when needed. The worker has no guarantee of work or pay in any particular week.

Prospect is strongly opposed to the use of these contracts and the insecurity and unfairness that is endemic in their use.

Many Prospect members work on contracts with no minimum or guaranteed hours. These are often described as freelance, consultants, or sessional workers. The term ‘zero hours’ may not be used as frequently as in many other sectors, but the impact is just the same.

In theory, there is no obligation on a zero-hours contract worker to accept offers to work, but in reality if they do not, they are unlikely to be called in again. The so-called flexibility is only one-way.

Employers don’t believe that a zero-hours contract means the worker has no legal rights. This makes zero-hours contracts very attractive to the employer.

But workers on zero-hours contracts have:

• serious insecurity
• extreme variation in pay
• a reduced means of challenging unfairness.

In many cases zero-hours contract workers do have statutory rights. The term ‘zero hours’ has no specific legal meaning. An employment tribunal has to determine the legal status of the contract and apply a range of established factors, such as the means of payment, degree of supervision, obligation to do and provide work, and whether a substitute could be sent along.

Applying these tests, tribunals have often determined that the reality of the situation is that there is an obligation on the person and they are in fact employees or workers with legal rights at work.

We have challenged this in many cases and have secured acceptance that the workers are, in fact, employees with full rights, despite varying hours of work.

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Individual or personal contracts

A personal contract is where terms and conditions of employment, especially pay, are individually agreed without being collectively negotiated. The contract can be tailored by the employer so that employees have different terms of employment, benefits or pay arrangements to their colleagues.

Pay is often the only truly personal element, and even that is not always the case. Personal contracts within an organisation or a group of workers are often fairly standard.

Legally, all contracts of employment are individual, as the means of enforcing any contract is down to the individual employee and employer. Staff on personal contracts have the same statutory employment rights as other employees.

People on personal contracts can still belong to their trade union and have as much need for union assistance as other members with collectively agreed terms.

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Fixed-term contracts

A fixed-term contract is where the employment contract is:

• for a specified period
• to complete a particular task, or
• ends on the occurrence (or non-occurrence) of a specific event.

Being on a fixed-term contract can affect:

• career progression
• access to training
• the ability to get a mortgage.

Many employees across the economy work on fixed-term contracts or as casual staff.

Prospect opposes the indiscriminate use of temporary appointments because they undermine the security, terms and conditions, and career development of all our members. We campaign for members on temporary and permanent contracts to have the same terms and conditions.

Download our guide to fixed-term contracts

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