Zero-hour Contract – A contract of employment where the employer is not obliged to provide any minimum hours of work
To remember what a zero-hour contract means, use the following mnemonic:
This week I could be working zero hours, according to my contract (zero-hour contract). My employer is not obliged to provide any hours of work.
Under a zero-hour contract, the employee is not guaranteed any work and the employer is not obliged to pay the employee if they do not work any hours. However, the employee doesn’t have to agree to work when asked either. Zero-hour contracts are often used in the hospitality, retail and care sectors, where demand for workers can fluctuate significantly. For example, a hotel may need more staff on weekends during peak holiday periods, but fewer staff during weekdays and during the off season. By using zero-hour contracts, the hotel can ensure that they have the right number of staff on hand to meet demand, without having to pay for staff who are not needed.
Zero-hour contracts can be beneficial for both employers and employees. For examples, they can provide a flexible workforce that can be scaled up or down as needed. For employees, they can offer the opportunity to work as much or as little as they want, and to fit their work hours around other commitments, such as childcare or education. However, zero-hour contracts can also be disadvantageous for both employers and employees. For employers, it can lead to higher recruitment and training costs, as they may have to constantly hire new employees due to the fact that employee turnover is much higher within businesses which commonly use zero-hour contracts. For employees, they can lead to insecurity and instability, as they may not know how many hours they will work from week to week or month to month.
Zero-hour contracts have been banned in countries such as New Zealand, Denmark, France, Italy and Spain due to their controversial nature. It is claimed that they can be used to exploit labour and allow punishments to be handed out in the form of withholding hours from employees for minor infractions or not agreeing to work certain hours (which is their right).
Some of the largest companies in the UK that heavily use zero-hour contracts include:
- Sports Direct – 90% of workers on zero-hour contracts
- McDonalds – 90% of workers on zero-hour contracts
- JD Wetherspoon – 80% of workers on zero-hour contracts