Zero hours contracts: points for consideration

Published: August 2 2013

Zero hours contracts have been taking a lot of criticism in the press recently. The intention of such a contract is that the individual will be a worker, rather than an employee or self-employed contractor. A zero hours contract does not guarantee work from the employer, but the worker is generally expected to accept any work offered. As workers rather than employees, as an example are still entitled to paid annual leave, statutory sick pay, pension contributions under auto-enrolment rules and rest breaks under working time regulations. Employers can make good use of zero-hours contracts when there is additional work or cover needed, as they can draw from a pool of trained and available staff. This can also be beneficial for workers who are genuinely willing and able to be flexible, for example, students looking for holiday work.

However, the downside is that the flexibility is all from the employer which can be attractive for businesses in the current uncertain economic climate. Another tactic is to put workers on very part-time contracts, such as 8 – 10 hours per week, and then offer additional hours up to as much as 40 or more per week.

The uncertainty of guaranteed work gets passed on to workers, who may be forced to accept zero-hours contracts as that is the only employment that is available to them in their area, and who then find it difficult to have a predictable income or a predictable work pattern to help with domestic responsibilities. There is also the issue of how work is allocated and whether workers may be overlooked for work if they have raised any complaints or other issues. They may also end up out of pocket on travel costs if they turn up for work and are then turned away because they are not needed.

Ultimately, this has a negative impact on employer reputation and could affect the smooth running of a business if workers are not available for such work, and profitability if adverse publicity or word of mouth means customers stay away. There is a moral argument that responsible employers should have a relationship with their workers which genuinely reflects the work available, and is not exploiting the local workforce. It is, therefore, welcome news that Vince Cable has commissioned an investigation into these types of contracts, but the publicity about employers who have zero hours contracts for a majority of their workers should not overshadow the benefits that such contracts can bring to workers and employers.

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