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Business Analysis & Features

Zero-hours contracts: What are they – and what's the problem with them?


What is a zero-hours contract?

Typically they mean a boss is under no obligation to provide a worker with a minimum number of hours - and in turn the worker does not have to accept the shifts on offer. There is no legal definition as the term is a relatively new phenomenon.

What’s the problem with them?

No guarantee of work can make for a very precarious existence. If you need to pay your rent and bills and are told at no notice there will be no shifts for you this week, budgeting can be impossible. On average, someone on a zero-hours contract usually works 25 hours a week compared with 37 hours a week for people employed normally.

Do workers dislike the contracts?

Just over a third of those on zero-hours contracts want more hours, with most wanting them in their current job, according to ONS. Research by CIPD suggests that 46 per cent of people on them have had shifts cancelled at very short notice.

Can’t people just make up the hours in another company?

This may be possible if there are other jobs available. But some of the worst zero-hours contracts have exclusivity clauses in them, meaning even if you are not being given any shifts you cannot work for rivals.

Are they ever good for employees?

They can be, for someone who really needs flexibility. For example, if you have commitments which mean you want to be able to turn down shifts when they are not convenient. However, in practice many companies would look dimly on an employee who continually turned down hours offered.

Why do employers like them?

It means they can constantly adjust their workforce according to what is needed and the financial state of the company, making it easier to keep things profitable.

When are they used?

They can be a genuine temporary solution, for example, if a last-minute event comes up or cover is needed for someone who suffers an unexpected bereavement. But they are increasingly being used for longer periods as a way to remove an employer’s obligation to provide work.

Who is on them?

Women, the under-25s and over-65s are most likely to be employed in this way. This may reflect a need to fit flexible working around retirement and education. Almost half of all businesses in tourism, catering and food report using them. In health and social work more than one in five employers report using them.

Do zero-hours workers have any rights?

Yes. They still have a contract which entitles them to holiday pay and other basic rights. They just may not know if they have any work next week.