Zero hours contract - easy come, easy go

Posted on 2nd September 2015

Employment contracts are in the headlines again. It seems that zero hours contracts are on the rise, a 20% rise over the last year, according to this article in the Independent and the government is defending them.

Why would the government defend zero hours contracts? They're good for business – and, it is argued, good for workers too. But are they?

A zero hours contract is a contract where an employer can take on workers and provide them with work as and when the company needs the work to be done, without any guarantee of work.

Zero hours contracts are flexible. A company can take on staff without providing any minimum working hours. This is good news for companies who need temporary staff or for growing companies as they can gradually increase staff as the work increases. Some companies prefer to have staff on zero hours contracts permanently rather than making those on zero hours contracts permanent after a certain period of time. Although financially good for the business, workers will probably look for another job with more security, staff turnover will increase, resulting in higher costs and an unstable workforce.

Workers do not have to work exclusively for one employer. For workers who are highly paid and have sought after skills this means they can work for several companies and probably work the hours they choose. The care sector often uses zero hours contracts and for those workers paid the national minimum wage and not provided with many hours' work each week, life can be difficult. They may not work enough hours to be entitled to statutory sick pay, may experience difficulty paying regular bills and have problems trying to rent a property or obtain a mortgage without a regular income.

Staff can be called to work at short notice and there is no obligation for staff to agree to work. This can be useful for those who would like to work extra hours such as students who could obtain extra hours' work to fit in with their studies. Although workers can refuse work offered, by refusing to work at short notice the worker could be penalised. The employer may tend to give future work to the worker who agreed to work at short notice.

For workers needing childcare, without fixed hours on fixed days, they may find it difficult to obtain a place at a nursery at short notice where childcare is usually provided on pre-arranged days.

Staff on zero hours contracts have certain rights and are entitled to annual leave. Staff on zero hours contracts have limited rights if they are a worker rather than an employee. Holiday pay is worked out over a period of time meaning if a worker has not worked very often over the last month, their holiday pay will reflect that. 

When used in the right circumstances, zero hours contracts can be beneficial to many. Staff at McDonalds on zero hours contracts receive their shifts two weeks in advance and, according to the UK boss of McDonalds, they love the flexibility of zero hours contracts.

Would you choose to work on a zero hours contract over a permanent contract?