Zero hours contract redundancy - The Entrepreneurial Way with A.I.


Tuesday, September 21, 2021

Zero hours contract redundancy


By Anna Jordan on Small Business - Advice and Ideas for UK Small Businesses and SMEs

Zero hours contract redundancy is trickier than making employees redundant

Some people question what redundancy looks like for people on zero hours contract.

Whether or not they get redundancy depends on their employment status. Redundancy pay only applies to zero hour employees. Remember that zero hours employment includes the right not to be unfairly dismissed by way of redundancy as well as redundancy pay. They also have a right to a notice period.

You should give all staff statutory notice of:

  • One week if you’ve employed them for one month or over, but for less than two years
  • Two weeks if you’ve employed them for two years. For every year after that, you should add one extra week’s notice up to a maximum of 12 weeks

You can terminate a zero hour worker’s contract without notice but they can also leave without any warning. And even if you offer them work during a notice period, they don’t necessarily have to take it.

How do I calculate redundancy pay?

Redundancy pay should be similar to a regular employee in that it’ll be based on age and length of service. Under zero-hour redundancy, pay must be the average in the 12 weeks leading up to the redundancy notice. It’s also likely that the length of service will be counted from the day the employee started working, even when there were gaps in work.

You must provide your employee proof in writing as to how you calculated their redundancy pay.

Yous should also pay the employee’s redundancy by their final pay day. If you don’t pay up on time, you may be taken to an employment tribunal.

It’s vital to get your zero-hour contract right from the start. Find out what you should include in our Zero-hour contract template.   

From there, you’ll also have to calculate remaining holiday pay. Find out more at Zero hours contracts holiday entitlement and holiday pay.

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Anna Jordan, Khareem Sudlow