Good Work for All: From zero hours to fixed hours: how Adnams made the transition

In 2015 brewer, hotelier and wine merchant Adnams took the decision to get rid of zero-hour contracts and move its employees onto fixed contracts with a minimum number of guaranteed hours. The company believes it is easier to attract new employees now it can guarantee hours, while still offering the flexibility valued by both the business and employees.

Adnams makes beers and spirits in the coastal town of Southwold, Suffolk, and exports to over 27 countries across the world. It also owns and manages a small number of pubs and inns, as well as 12 retail stores across East Anglia.
 
Adnams employs around 560 staff across a range of roles, including hospitality, logistics, admin and sales. In 2015, it took the decision to get rid of zero-hour contracts and move its employees onto fixed contracts with a minimum number of guaranteed hours. This decision was taken as part of a broader strategy to improve customer service by increasing pay and job security. It was also prompted by a spate of negative press coverage around the use of zero-hour contracts.

The process
As a seasonal business, Adnams had always issued a small number of zero-hour contracts to its hospitality staff. However, when it examined its workforce data it discovered that most of its employees had a relatively regular working pattern.
 
In order to make the transition to fixed contracts, the HR team reviewed each department in turn to identify the minimum number of hours worked by employees over a 12 month period. Minimum hour contracts were then issued for the highest number of hours possible with the intention that staff would be asked to work more hours as and when demand required.
 
Each minimum hours contract is unique to the individual. With new starters, the business will work out the minimum number of hours they can offer, and will then have an open discussion with the individual about what opportunities exist to flex up from that point during busy periods.
 
Adnams spent time with line managers and teams to communicate the decision and address any concerns. Some store managers were worried that they wouldn’t be able to get staff to accept more hours, or that there would be additional pressure on budgets if they had staff contracted for more hours than they needed.
 
Likewise, some employees were concerned about meeting their contracted hours. The HR team reassured employees that they still retained the flexibility to agree changes to their hours with their manager. They also emphasized that access to employee benefits would continue to be calculated based on actual hours worked, rather than hours contracted, and so there would be no change to entitlements as a result of the changes.
 
The benefits
  • Approximately 10% of employees were moved onto minimum hours contracts giving them greater security and predictability of income.
  • Employees are better equipped to get loans, mortgages and mobile phone contracts with guaranteed employment.
  • Adnams believes it is easier to attract new employees now it can guarantee hours, whilst still offering the flexibility valued by both the business and employees.
 
 
“I love knowing I have a guaranteed amount going into my bank each month as it means I can try and budget better. Sometimes I ask for extra hours and get them if they’re available and sometimes my Manager asks me to work extra if I can. The nice thing is we just make it work between us”
Adnams employee
 
Lessons learnt and advice for other employers
Overall, staff have been very supportive of the change. They like the certainty that their monthly pay remains the same or more. And the business hasn’t experienced any problems around the take-up of extra hours. They credit this success to regular communication, training, and having the data to support the case.
 
Another reason the transition went smoothly was due to the fact that zero-hour contracts at Adnams carried the same terms and conditions as fixed hour contracts. This meant that when employees switched over they still had access to exactly the same benefits and rewards; notice periods; and holiday accruals.
 
Sadie Lofthouse, advises other employers to be aware of this before making the change: “If you’re relying on a zero hours contract that is significantly less favourable than other contracts, then you’ve got to be really open about what the total cost is. At Adnams benefits were the same regardless of contract type; but I am aware of companies that operate a ‘two tier’ system. If that is the case then you need to ensure you cost the additional benefits that employees who are moving onto new contracts may be entitled to receive.”