60 second guide: to zero hour contracts
1 min read
A zero-hours contract is an arrangement used in both the public and private sectors under which a worker has no set hours, is not guaranteed work and is only paid for the work that he or she carries out. Generally speaking, workers are usually expected to be available when the employer needs them to work, but can refuse any offer of work.
Why do employers use them?
They provide employers with flexibility when business demands fluctuate, as they do not need to offer any formal hours of work and there is no obligation to offer any work to an individual. From an individual's perspective, they have flexibility as to when they wish to work.
Are they legal?
Yes. There has been a lot of press coverage recently about zero-hours contracts, including a pledge from Ed Miliband that Labour would crack down on the use of these types of contracts. However, the fact of the matter is that the use of these types of contracts is not new and simply represents a form of casual working. They offer an ability to flex resource as business demands change.
Pros and cons
From an individual's perspective, these types of contracts do not offer much financial stability or security, as some workers find that they are not being given enough hours. In addition, being on a zero-hours contract means that the individual doesn't have the same employment rights as those on traditional contracts, and commentators are concerned that these contracts are being used to avoid the responsibilities that come with a normal employment relationship.
While the use of these types of contract can be appealing from a flexibility angle, employers should also bear in mind that individuals under these contracts are unlikely to be very committed to the business and may also be less productive.
The government has yet to confirm whether it will launch a consultation on the use of zero-hours contracts.
