Flexible Employment Contracts and How to Use Them

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Flexible employment contracts can be beneficial for employers and employees. They help you run your business efficiently, whilst ensuring you have people available when needed.

Flexible contracts should be easy to understand and manage. However, they can sometimes be complex so having clear communication and admin procedures is essential.

You may need flexibility to respond when you can’t predict customer needs, or with seasonal busy periods, or when you know your business is quiet.

There are various options if you need more flexible contracts for your business.

Temporary Contracts / Casual Worker Agreements

Use ‘Temps’ or Casual Workers if you only need someone for a short period, or if you can’t predict hours.

This is relevant for seasonal working or having people on call out to provide cover.

Having a bank of casual or temporary workers to call upon when you need to is a common approach. When you are busy you offer work and when quiet you don’t. A casual worker has fewer employment rights. It’s also easier to end a casual worker agreement or temporary contract and you may not need to give notice.

The downside of using temps or casual workers is that people may not be available when you want them. They also don’t have to provide you with any notice to not work and may not turn up!

If you offer regular weekly hours to someone, this type of contract might not be the best option. Using a permanent zero-hours contract or regular part-time employment contract may be better.

A temporary/casual worker could also be an agency worker, hired via a third party.

Zero Hours Contracts

Zero-hours contracts can provide employment status and increased loyalty without having to guarantee regular working hours.

Zero hour’s contracts may oblige individuals to accept any work. This is different from a casual workers contract, where it is up to the individual to decide whether they accept work. For regular, but variable hours, zero-hours contracts give you the flexibility to deal with fluctuating business needs.

Find out more about zero-hours contracts.

Fixed Term Employment Contracts

If you need longer periods of work, a fixed-term contract may be better.

Fixed-term contracts are for a defined period. Use them to cover things like maternity leave or long-term sickness cover. Or for delivering projects with a limited period of funding.

Fixed-term contracts have a defined end date or reason for the contract to end. For example, when someone returns from maternity leave, or upon completion of a project. 

Find out more about fixed-term contracts.

Compressed Hours Contracts

Compressed Hours Contracts allow employees to work full-time hours over a shorter number of days.

Examples for compressed hour contracts are:

  • 1 day off per week (full-time hours spread over 4 working days rather than 5)
  • 1 day off per fortnight (full-time hours spread over 9 working days rather than 10).

Compressed hours contracts provide flexible working, without reducing employment rights or salary. However, the requested work pattern still needs to match your business needs.

Annualised Hours Contracts

Often used for shift workers or seasonal employment. Annualised hours guarantee a certain number of hours work over the whole year. The total contracted hours are paid in equal weekly or monthly instalments. This provides a regular salary for staff.

The number of hours worked each week or month will vary. Fewer hours are worked when quiet and more hours worked when busy. This removes the need for overtime.

Accurate prediction of hours is important to avoid labour costs being higher than necessary. You should also regularly review actual hours worked against hours predicted. If necessary, agree on any contract adjustments required. Careful recording of hours is important. If an employee leaves part way through the year, you’ll need to calculate any under or overpayments made.

Term Time Hours / Reduced Weeks Per Year

These contracts are commonly used in the academic sector, or for employees wanting to be at home during school holidays.

Term time hours contracts must tie in with school term times. They offer a good work-life balance for staff. Salary costs are lower, as employees are paid to work for 39 weeks of the year. Staff generally can’t take holidays during term times. They are expected to take their pro-rata paid holiday entitlement during school holidays. Salary is paid in equal monthly or weekly instalments throughout the year, providing a regular fixed salary.

This type of contract can result in reduced staffing during the school holidays. If you need cover during the holidays, you will either need to pay overtime or bring in extra workers for short periods of time.

You can also agree any work pattern requiring less than 52 weeks per year paid work time.

Mix & Match

The above contract types can be combined if needed. For example, you may like to explore a fixed-term contract on annualised hours!

If you need advice on using flexible employment contracts in your business, please get in touch. Contact Debbie on 07885 370054 or email debbie@concilium-hr.co.uk.

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