What are zero hour contracts really?

What are zero hour contracts really?
September 22, 2017 Lauren Howells

What is a zero hour contract?

Zero hour contracts have received their fair share of bad press over the past few years. But what exactly is a zero hour contract and should you avoid them?

CashLady answers your questions by taking a closer look at these controversial contracts.

What is a zero hour contract?

Also known as ‘casual contracts’, zero hour contracts do exactly what they say on the tin. If you are employed under one of these contracts, your employer doesn’t have to give you any work.

Equally though, you usually do not have to take work when asked.

In essence, zero hour contracts enable employers to have employees ‘on call’ when needed. However, employers are under no obligation to give these employees any work if they are not required. 

Some zero hour contracts specify that employees must take the shifts that they are offered. As this is sometimes at very short notice, this could damage an employees ability to plan time with their family or friends.

Why are zero hour contracts controversial?

Zero hour contracts have a reputation of offering less financial security than other types of contracts. This is because people often do not know how many hours they will have from one month to the next. 

According to ONS statistics reported by the BBC in 2015, employees on zero hour contracts were working around 25 hours a week. A third of people on these types of contracts said they wanted more hours. This was compared to only one-tenth of people in employment.

Some people think that zero hour contracts are used by employers to avoid their “responsibilities to employees”. 

On the other hand, some employers say that the flexibility of zero hour contracts is essential for their business. Additionally, these contracts have the added benefit of giving workers more flexibility, too.

It was recently reported that a “record number of workers” are now on zero hour contracts.

What am I entitled to under a zero hour contract?

For those looking for work, a zero hour contract may not offer the same stability that another type of employment contract could offer.

If you are employed under this type of contract, you could find that work is irregular. Also, your employer may require you to work at quite short notice.

However, those on zero hour contracts are still entitled to receive national minimum wage and statutory annual leave.  

To check if you are being paid the national minimum wage, you can use the Government’s minimum wage calculator.

At the time of writing, the statutory annual leave entitlement was 5.6 weeks per year.

Your employer is also still responsible for your health and safety when you are employed through a zero hour contract.

What is not included in a zero hour contract?

This depends upon your specific contract. However, many employees on this type of contract do not get sick pay. 

If I have signed a zero hour contract, can I look for work elsewhere?

If you are employed through a zero hour contract, there is nothing stopping you from looking for work elsewhere.

According to the government website, any clauses in your zero hour contact that forbid you from looking for work with another employer can legally be ignored.

What is a zero hour contract?

What do MPs think about zero hour contracts?

Labour’s Shadow Secretary of State for Business, Energy and Industrial Strategy, said that it was a “national scandal” that there were 1.4 million contracts that don’t guarantee minimum hours (the latest ONS figures).

She went on to say that the government urgently needed to get a grip on the “broken labour market” which she believes is “rigged against workers”.

The future of zero hour contracts

The future of zero hour contracts remains in the balance.  

The financial instability that comes hand in hand with many of these types of contracts, can make it difficult for people employed under them to budget for necessities, such as food and rent.

However, some people do like the flexibility these contracts offer them.

Others have no choice but to take a zero contract, as it is the only thing available to them.

The controversy surrounding this method of employment is unlikely to go away. There will always be those who believe these contracts take advantage of people who are unable to find anything else.

As money management can be even more difficult on a zero hour contract, it can be helpful to ensure that you have a budget. Take a look at the CashLady guide on how to write and manage an income budget properly for more information.