Is the Introduction of Zero Hours Contracts Useful or an Additional Complication?

Published: 05th June 2013
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Copyright (c) 2013 Alison Withers

It is reported that increasing numbers of employers in the UK have been using the relatively new concept of Zero Hours Contracts when recruiting staff.

Using these contracts allows employers to have workers on call and be paid only for the hours they actually work and they are gaining in popularity partly because of the continued difficult economic conditions many businesses are facing following the financial crisis of 2008.

Paying only for the time a worker is actually needed can help a business maintain its competitive advantage in its sector.
Another benefit to the employer, it is argued, is that it enables them to retain key people who may be important to the future of the company is recovery from the recession begins.

While the system may offer the employer the flexibility of only paying staff when they actually need them, however, there have been some concerns raised about what such agreements actually mean, both in terms of the employer's responsibility to workers and of the employee's rights and conditions of employment.

Neither employer nor employee is tied into a stated or guaranteed number of hours of work and in fact some employment experts advise employers to even be careful to avoid using the term employee to refer to someone on a zero hours contract, especially if they have been called on to work a specific number of hours each week over a period, since it opens up the opportunity for the worker to argue that they are in fact an employee entitled to a wider range of employment rights.

In theory, because it is a form of contract, the employer does have some obligations to employees. Most obviously they are still responsible for the worker's health and safety when they are working.

It is also argued that any worker on a Zero Hours Contract must be paid at least the minimum wage and is entitled to some holiday calculated on the basis of the hours they have worked for the company.

On the other hand, workers' representatives, such as the trades unions, argue that the Contracts actually undermine employee rights and instead of offering a flexible working pattern that some people may prefer to fit around obligations such as family they actually make life more difficult.

Among the objections cited are the uncertainty of not knowing how much an individual may earn each week while at the same time they are tied to a contract that makes it difficult for them to seek other employment and can affect welfare benefits.

It is, they say, also a system that is open to abuse in that employees are expected to be available with little advance warning.

Unions also argue that the Zero Hours system can lead to arguments over employment rights based on whether there is a mutual obligation or relationship between the employer and the worker and this has already led to test cases being heard in employment tribunals.

It is argued that if there is a relationship between the two, as would be implied by the notion of a contract, albeit a Zero Hours Contract, then an employee on a zero hours would have the same comparative rights as other employees such as rights on unfair dismissal, redundancy payments and annual leave.

Plainly, it will be some time before the situation in these contracts is clear and in the meantime candidates looking for more flexible working arrangements might prefer to sign on with a recruitment agency and operate as agency workers, where the law is more clearly defined.


There are questions about the benefits of Zero Hours Contracts to employees in terms of employment rights and continuity of a reliable income. By Ali Withers.

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