Zero Hour Contracts: Are They for You?

Zero Hours ContractsVery few working situations have received as much scrutiny as zero hour contracts in 2013.

After it emerged that Sports Direct hire the majority of their workers on a zero hour basis—with many worrying about the lack of security—the media and politicians were quick to attack them. Although these contracts are not for everyone, they do come with benefits as well as pitfalls.

Understanding more about these contracts can help you determine whether they are for you.

Zero Hour Contract Basics

A zero hour contract means you receive pay only for the hours you work. Some contracts are completely flexible, which means you can choose your hours. Other employers write in contractual obligations, but you will not benefit from sick days, maternity leave, or paid annual leave.

These contracts are typical of certain industries. You are most likely to find them in the pub, retail, tourist, events, and attractions industry. However, some niche industries use them also. Buckingham Palace and the Labour Party are also zero hour contract culprits.

As a zero hour worker, you have no guarantee of work, which means there is no real security.

Zero Hour Contract Statistics

As of August 2013, the latest statistics from the Office for National Statistics (ONS) was that 200,000 workers were existing on zero hour contracts. However, the Chartered Institute of Personnel Development (CIPD) claim that the ONS’ statistics are low.

According to the CIPD, around 1,000,000 people have zero hour contracts. Considering the number of large employees using these contracts, the CIPD’s estimation seems more appropriate.

Controversial Working Conditions

When implemented properly, these contracts do provide flexibility for employees.

However, many employers are taking advantage of employees with the terms they write into contracts. For example, some choose to make their employees sign a contract stating that they will not work elsewhere.

This naturally takes away the supposed flexibility that comes with zero hour working. Another controversy comes in the form of how these contracts cloak real unemployment statistics. While some claim that they are beneficial as they take people out of work, others claim that they disguise the real problem with 2013 unemployment.

A zero hour contract worker who receives no work from one week to the next is still classified as employed. This clouds the reality of UK employment and economic recovery.

Zero Hour Contracts: The Benefits

Zero hour contracts have caused a lot of controversy in the news lately.

Although they are not compatible with all lifestyles, there are some benefits to working as a zero hour contract employee. If you are a student, or you need part-time work on top of another job, you can reap the benefits that come with this type of contract. Examining them in full is a good way to determine whether this is the right working lifestyle for you.

Flexibility

You cannot deny that zero hour contracts come with a lot of flexibility. If you have a full working week free, you can work part-time hours. When other obligations crop up, you can cut down your hours to suit them.

This is useful for students, whose timetables often change at least once every six weeks. A zero hour contract can allow students to supplement their education with part-time work, without having to worry about missing lectures.

Similarly, if you work full-time but need part-time work to earn more money for Christmas, holidays, and birthdays, this type of contract allows you to get extra hours in.

Free Time on Your Terms

On average, zero hour contract workers work less than those who work full-time jobs. In addition to this, they also get to choose free time according to their terms. If you are religious and would like to observe certain holidays, there is less chance that you need to compete with others to get the time you need, as your employer has a pool of other workers to turn to.

Similarly, if you have family obligations and would like Christmas off, you can leave the festive season to those who are happy to work it. This also comes in useful for those who want to go on holiday. Normal working contracts can allocate at least four weeks leave by law. With these contracts, you can choose longer.

There is Room for Progression

If you want to get into the working market but set part-time and full-time hours are not for you just yet, a zero hour contract allows you to get your foot in the door. Ultimately, this shows more commitment to working life than remaining unemployed. If you show your commitment to your employer, you can aim to move onto a long-term contract.

Despite all their controversies, zero hour contracts do act as a good way for those who are making the difficult transition from benefits to the workplace simpler, which means they are always worth considering.

 

Zero Hour Contracts: The Pitfalls

Although zero hour contracts come with some benefits, they are clearly not for everyone.

Naturally, many people worry whether their contracts will provide them with the security they need. In some instances, employees worry that they will lose their jobs if they do not meet the working demands of their employer.

These contracts often make life difficult for those who rely on childcare, as you cannot provide a childminder or nursery with details of your working week well in advance. For those who seek guarantees of maternity, sick pay, and paid leave, zero hour contracts are far from ideal.

Less Employee Benefits

Ultimately, few employees can work throughout the year with no interruptions. If you fall sick, need to take a holiday, or fall pregnant, zero hour contracts do not offer you the same protection as other contracts. If you rely on these contracts for full-time hours, you find yourself at a financial deficit when you take time off.

In contrast, normal contracts can provide four-weeks paid leave. When it comes to maternity pay, you have to go through the process of arranging maternity allowance, rather than statutory benefits. This comes with no guarantee of returning to your job, which certainly makes these contracts challenging for prospective mothers.

A Disorganised Working Lifestyle

The flexibility of a zero hour contract is not likely to appeal to those who rely on childcare to help them work. As any parent will know, childminders and nurseries like to know that they have a certain number of hours from you—as they cannot just allocate the whole week on the off chance that you may use them.

You also need consistency to get support in the form of working tax credits based on childcare needs. Even if an employer states that you can work a certain number of hours, the nature of the contract means that this can end at any point.

Minimal Security

Zero hour contract workers often worry about losing their jobs. These contracts mean that employers can provide you with as much work as you can handle one week, and none the next. Many also worry that they will find themselves unemployed if they do not take the hours offered to them.

If you are reliant on your contract for your basic lifestyle needs, the stress that comes with these worries can lead to a negative relationship with the workplace.