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What Are Zero-Hour Contracts?

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Kate has over eight years of experience as an employment and personal injury legal executive. She runs LawCat, a legal explanations website.

Zero-hour contracts have recently been in the media a lot; there are a lot of opinions about them, some for and some against. Some politicians have been trying to rally support by either supporting zero-hour contracts or fighting against them. But with such strong opinions regarding these type of contracts, it is sometimes difficult to separate opinion from fact. Like most things, zero-hour contracts are not as entirely one-sided as some people claim they are. This article will explain clearly and concisely just what zero-hour contracts are, how they benefit some employers and employees, and how they can potentially harm some employers and employees.

Are You on a Zero-Hour Contract?

What Is A Zero-Hour Contract?

A zero-hour contract is an agreement between an employer and employee for work and employment. Much like a standard contract for work, these contracts have terms which must be met by both parties for the contract to continue. If these terms are breached, then there are potential legal consequences. The contract cannot be overly in favour of one party over another and is subject to the same laws of enforcement and regulation as any other contract.

The main difference between a zero-hour contract and a regular employment contract is the terms regarding hours of work. Under a regular employment contract, an employer will contract an employee to work a certain number of hours each week or month. Regardless of the amount of work that needs doing the employee will always be assured of having X amount of hours each week or month. If the employer does not allow the employee to work those hours then the employee could have a claim for breach of contract. Likewise, if the employee does not work the contracted hours (unless due to sickness, holiday or prior agreement) then the employer could have a claim for breach of contract. Usually, if a contract is breached the employment relationship will end, although if the breach is substantial then legal proceedings such as a claim to the Tribunal could be made.

Zero-hour contracts do not have this term with regard to hours of work. Under a zero-hour contract, there is no obligation on the part of the employer to provide work, and there is no obligation on the part of the employee to accept work. This means that if the employee wants work the employer does not have to provide hours, and likewise if the employer has work that needs doing the employee does not have to attend work. There is no breach of contract due to the way the agreement is drafted regarding hours worked.

For employees, this means there is no guarantee of work from one week to the next. One week you could get a lot of work then the following week you may get no work. But it also means that if there is work you can refuse it without facing any detriment. You can’t lose your job for saying no to work.

For employers, this means you can have a large on-call workforce who you only have to pay when there is work available. So if your business is not always regular, you do not have to pay a labor force when there is nothing for them to do. But it also means that if at one point you find your business has a lot of work needing to be done, you might not have any employees to call upon as they have the right to refuse the work if they choose to.

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Zero-Hour Contracts in a Nutshell

Under a zero-hour contract, employees have the same employment rights as regular workers under a work contract. Employees are entitled to annual leave, the national minimum/living wage and pay for work related travel.

If they have an extended period without work, however, it will count as a break in their employment so this will affect rights that accrue over time.

It was made illegal in May 2015 for employers to put exclusivity clauses in your contract.

Are Zero-Hour Contracts Good or Bad For Workers?

Zero-hour contracts are neither good nor bad. They will work for some people or businesses and not others; it is entirely dependant on your own personal or business situation.

That being said, if you are an employee in need of a regular income, then a zero-hour contract is unlikely to work for you as you have no guarantee of that income. You could work 30 hours one week, 40 hours the next week and then 10 hours the week after. The work pattern could be erratic and if you're supporting yourself and/or your family solely on your work income, then this may not be for you. However, if you have a busy and unpredictable lifestyle, then a zero-hour contract could work well for you; you accept work when you can and refuse it when you cannot.

That being said, when accepting a job and signing a contract, you should read it very carefully. Make sure you know what kind of contract you are signing; you would not want to agree to a zero-hours contract without intending to. You should be very clear with any prospective employer what your expectations are regarding your hours and workload.

Like with all contracts, read the fine print. You are perfectly in your rights to request reading time for any contract prior to signing it. Ask to take it home if need be, as long as you do not cause an unreasonable delay this should not be an issue.

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Conclusion

In conclusion, there are a lot of strong opinions regarding zero-hour contracts, but if you look at them, it is apparent that they have both pros and cons for both employers and employees. They do offer a high degree of flexibility for both employers and employees, but they do not offer any security to either party.

It is easy to see how the employer could be seen to be in the stronger position, as most of us need regular work to earn a living. But the risk is still present to employers; if an employee has several jobs on offer, they can pick and choose which to take, and this puts an employer at risk of not having the workforce on hand when it is needed most.

A zero-hour contract may not be the right fit for everyone but for someone looking for work to fit into a busy schedule, or for an employer where the level of work often fluctuates, then they can be ideal.

This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.

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