A ‘zero-rated’ contract is an agreement between two parties where an employee is asked to perform work with no set minimum number of hours. The contract states what the employee will earn for the work they do and possibly how they will be offered work.

In the case of a ‘zero-rated’ contract, employees are only paid for work they have done and the contract is offered without guaranteeing the employee actual working hours. The working hours are controlled by the employer who will offer work when it is available. With ‘zero-rated’ contracts, employees are dependent on the employer and may go for months without being called to work, which prevents them from earning a salary even though they are employed.

However, in terms of Section 9A of the Basic Conditions of Employment Act (BCEA), an employee earning under the BCEA threshold, who works for less than four hours on any day, must be paid for four hours work on that day. This payment will be at the normal minimum hourly rate of pay. The BCEA provides maximum working hours that an employee can work but does not provide for minimum working hours. However, Section 29(1) of the BCEA requires employers to provide employees with their ordinary working hours and days of work, what they will be paid and the frequency with which they will be paid. So ‘zero-rated’ contracts may not comply with Section 29 of the BCEA.