Zero Hour Contracts: Hero Hour Contracts?

An Exploration of Zero Hour Contracts in Modern Day Britain

By Susannah Scott and Iona Garland

What Are Zero Hour Contracts?

In the UK, a zero hour contract is effectively where a person is contracted to work but has no set or guaranteed hours. Although they will not have guaranteed hours they are not obligated to accept hours offered, meaning it is very flexible. This type of contract tends to be particularly popular for people who desire casual work and cannot commit to 9 to 5 hours five days a week, such as students. While they are legally employed they have worker rather than employee status which affects the rights they are entitled to.

Contrary to popular belief, workers under zero hour contracts are entitled to numerous rights in line with other workers, such as annual leave. This means you are entitled to a certain amount of paid time off work depending on how many hours you have worked. For example, most who work 5 days a week must receive at least 28 days paid annual leave per year. Workers are also legally entitled to National Minimum Wage, which is allocated by way of a gradient scale dependent on your age. Furthermore, there are rules which concern payment for traveling time as a requirement of the job for those under 0 hour contracts. This does not include being paid for commuting but applies to any travelling undertaken during the work they are being paid for.


Criticisms of Zero Hour Contracts

Recent controversies in the media concerning zero hour contracts involve large companies such as McDonalds and JD Sport. McDonalds recently announced it will offer workers an opportunity to switch from fixed hour contracts to zero hour contracts, leading to many fearing they will not be entitled to the same rights or have the job security they previously had. The controversies highlighted by the media have led to firms such as Sports Direct to move away from zero hour contracts in recent months.

The media debate has resulted in prominent political figures speaking out either in favour of or against the contracts. Current Prime Minister Theresa May refuses to condemn them stating “There are people who genuinely say… it is a benefit to them to be on those contracts”. However leader of the opposition Jeremy Corbyn has made it clear he is against the continuation of the contracts and believes they are exploitive.

Mr Corbyn’s opinion is the one largely favoured by the mainstream media in recent times. There are numerous articles petitioning for the ban of zero hour contracts in the UK. This argument is largely based on the misconception of the extent and number of rights the workers hold, and the continued exploitation of workers by employers who aren’t respecting employment rights.

Common complaints relating to zero hour contracts generally revolve around the idea that the workers must be free at all times, but are never guaranteed work and so this is highly restrictive with regards to having a second job. This should not be the case if employers fully respect their rights. Workers should generally have protection from exclusionary clauses which prohibit them from undertaking other work. Furthermore, it is not only workers under zero hour contracts that have complained about this issue. Workers in many types of contracts have similar complaints of hours being changed last minute and not being respected. Therefore this issue is not specific to zero hour contracts, and it is arguable that this relates more strongly to exploitative employers in general.


Benefits of Zero Hour Contracts

Zero hour contract workers who have an employer who adheres to the laws regulating zero hour contracts generally benefit from the flexibility and freedom that comes with no set hours. Increasingly in modern times people are looking for more casual work that fits around their lifestyle.

Those who benefit most from the flexibility that zero hour contracts encompass are students, single parents and those unable to work full time due to illness or disability. Students in particular benefit as it is easier to balance their work commitments alongside their studies. Without access to less restrictive contracts, many students would be unable to support themselves throughout their studies without sacrificing much required study time. Likewise, single parents and those who for health reasons cannot work full time often look for zero hour contracts. They are not required to accept all shifts offered to them when it doesn’t suit. This makes it possible for them to earn an income when they otherwise would not be able to due to their circumstances. Other categories of people who benefit that aren’t generally mentioned by the media and politicians include oil industry workers, who are in a job type which does not require them to work with much regularity because of the nature of their role within the industry. Retired people looking to subsidise their pensions without too intense a time commitment also enjoy the flexibility aspect. Additionally, zero hour contracts are simply preferred by many people over fixed hour contracts.

Employers also benefit from the contracts as they can easily access staff when needed but there is not a consistent need to pay people when they are not necessary. For example, substitute teachers are often needed inconsistently and at a moments notice. Therefore, fixed hours contracts are not the most effective form of employment in this context. Other types of employment that require workers sporadically include waitressing for events and working as a front of house assistant at venues such as theatres, as there is not a consistent flow of work available. Many companies would not be able to function without access to flexible workers, therefore a ban on zero hour contracts would potentially cause irreparable damage for employers across the UK.

As so many different sectors of the workforce and employers benefit from zero hour contracts, it is clear that the suggested ban would be detrimental in the UK to both workers and employers. As MSP Liam Kerr has stated “A ban on zero hour contracts would be an unnecessary manipulation of the market”.


Potential Reform

Accepting that there are clear issues for people on both zero hour contracts and other contracts being exploited, there may be room for potential reform in the law which allows zero hour contracts to continue but with additional protection for workers.

In the year of 2016 New Zealand ‘banned’ zero hour contracts, as reported by some UK mainstream news outlets. The media went on to suggest that the UK should follow suit in implementing a similar ban. However, the word ‘banned’, in this context, is very misleading as zero hour contracts are not actually banned. The only substantial change is that they are now more efficiently regulated. On the New Zealand government’s website (Ministry of Business, Innovation and Employment) an example of this is shown as it is stated that there is a prohibition on, ‘employers putting unreasonable restrictions on secondary employment of employees’.

The legislation relating to this is the Employment Relations Amendment Act 2016, which was originally stated to have the aim of “mak[ing] workplaces fairer and more productive, for both employers and employees” (Report from the Transport and Industrial Relations Committee, 12 February 2016). It is very much still possible to have a ‘zero hour contract’ in New Zealand as it is not necessary to have set hours, however, if you desire set hours per week they are contractually obligated to give them to you. This has therefore fulfilled the aim of the Act, which had underlying principles of fairness and productivity in the workplace, without an outright ban of zero hour contracts being implemented. As such, a complete ban would not be required in the UK to emulate a similar policy which was also focused on fairness and productivity for both employees and employers.


Final Thoughts

The hotly contested topic of zero hour contracts is one which has received a lot of attention in the media in recent times. A large portion of the issues revolve around the misconception that workers on zero hour contracts are victims of unfair treatment exclusive to zero hour contracts. As discussed these issues are not limited to zero hour contracts but can be found in many employment contracts.

The use of zero hour contracts in certain sectors and for certain individuals is too valuable to be ‘banned’. Zero hour contracts are beneficial as they allow such employees to work when and where they are needed, and not be tied down to one area. Employers’ find benefits in flexibility also, especially where consistent work is not available.

Despite this there is clearly room for potential reform to aid the protection of all workers under contracts in the UK, while maintaining the useful aspects of zero hour contracts for employers and workers. A possible resolution to this aforementioned issues is that UK government could amend zero hour legislation, in a effort to reflect the fairness created by the 2016 New Zealand reform.