A zero-hour contract is where you have no guaranteed hours or fixed income, instead work is offered as and when an employer needs you. Zero-hour workers account for less than 3 percent of total employment in the UK, and they’re most often used by sectors that require a flexible workforce due to changeable staffing needs, such as restaurants and factories. As a zero-hour worker, you should have a proper contract of employment and all the accompanying rights and protections, such as national minimum wage or national living wage, sick pay, maternity leave, paid holiday, and pay for being on call or for work-related travel.
A key charge against zero-hour contracts is that of unpredictability, and the fact that shifts can be cancelled at very short notice. It has been suggested that higher hourly rates should be offered to compensate for the inherent unpredictability. Another drawback is unsociable hours, as you may be repeatedly given early morning, evening, weekend and bank holiday shifts, and although you’re under no obligation to accept those hours, they may be the only ones offered to you. Other disadvantages include the difficulty of budgeting to meet your financial commitments as your income isn’t fixed or guaranteed. Plus as a zero-hour worker, you may not be entitled to the same benefits as permanent employees, potentially missing out on bonuses or pension contributions depending on your contract.
Taking on a job with a zero-hours contract can be a great way to get a foot in the door of a company you’re keen to work for, showcase your flexibility, and make yourself available for consideration should something more permanent arise. And the flexibility of a zero-hour contract means you can make it work around studies and other commitments. Depending on your employer and the terms of your contract, you may be able to choose your hours according to your own schedule. There may be opportunities for overtime if, for example, you have lots of availability over the summer holidays. And during quiet times, you can look to bolster your income by taking on an additional job. Recent legislation has banned employers from preventing this, subject to a restrictive covenant if needed. So an employee has the freedom to seek additional work elsewhere to make sure they can earn the amount they need. And to further support zero-hour workers, employers are encouraged to suggest currently anticipated hours per week, not set in stone but a good estimate.
As an employer, having workers on zero-hour contracts is more cost-effective than paying agency fees for temporary workers. It also allows some certainty and control, enabling you to ensure all employees comply with your company policies and procedures, such as holiday or dress code, that you might otherwise struggle to enforce with contractors or agency staff.
Zero-hour contracts have had such negative press, and they don’t work for everyone, but some employers and employees prefer the greater flexibility they offer. Their use should always be based on a robust business case, but if the contracts are written properly and transparently with clarity on both sides, they can be really beneficial.