Zero Hours Contracts – An overview

by Katie Finbow

What are they?

Zero hours contracts (also known as casual contracts) allow employers to vary an employee’s working hours. In practice this means that employees will only work when they are needed and no particular number of hours or times of work are specified or guaranteed.

How common are they?

At the end of 2014, the Office for National Statistics (ONS) reported that the number of people employed on zero hours contracts was 697,000 in the period October to December. This figure represents 2.3% of all people in employment, an increase of 0.4% from the previous year.

Who uses them?

The ONS data shows that the industries most likely to offer zero-hours contracts are Accommodation and Food Services, followed by Education.  Employees are most likely to be women, people in full-time education or part-time workers. They are also more likely to be aged under 25 or over 65. On average, someone on a zero hours contract works 25 hours a week, although around a third of a people say they would like to work more hours.

What’s wrong with them?

While many employers believe this type of contract can create a flexible workforce and helps limit unemployment (for example following the global financial crises), there is some criticism that workers subject to zero-hour contracts could be easily exploited. Not having regular work or enough working hours can cause personal financial difficulties and difficulties arranging childcare. It is also thought that some employers use these contracts as a management tool to favour some employees with more hours at the expense of others who may then experience prolonged periods of no work.

What is written in a contract does not always protect employers from risks of certain actions, like this.

Under these types of contracts employee’s have the right to turn down hours that they are offered, this may leave the organisation open to the risk of not having the necessary staff cover.

To make sure your employment practices and contracts are compliant with the latest Employment Law contact one of Park City’s specialist HR Consultants.

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