Pros & Cons of Zero Hours Contracts

Zero hours contracts are a real hot topic at the moment and I am expecting this to be a conversation during my course today with the news that jobseekers will be no longer allowed to refuse this type of employment under the new Universal Credit benefit scheme.

Previously, those in receipt of jobseekers allowance and associated benefits were able to refuse to accept zero hours contracts without their benefits being affected, due to the potential sporadic work load the casual contracts dictate. Under the new Universal Credit benefits system, claimants who turn down zero hours contracts without good reason (ie. the Job Centre deems them unsuitable), may be sanctioned and therefore lose their benefit entitlement for more then three months.

There has been much attention in the press regarding zero hours contracts and one thing I hear often is that they are most common for workers under the age of 25 and for the over 60s. I am not seeing this. I perform job searches every day with my learners and many of them have been offered zero hours contracts regardless of their age. In fact, I don’t see any difference with age or type of work. Zero hours contracts, in my experience are becoming almost the norm in a variety of sectors, particularly teaching, retail, industrial and commercial office type roles.

The Office for National Statistics (ONS) took a snap shot view of zero hours workers for the first two months of 2014 and established there were 1.4 million workers in the UK who fell into this category. In a recent survey by the Chartered Institute of Personnel and Development (CIPD), the need for flexibility to cope with the peaks and troughs of the business year was highlighted by 66% of employers, for many of whom, zero hours contracts are an essential part of their recruitment strategy.

The Cons of Zero Hours Contracts

When I talk with my clients, the number one reason for them rejecting (or not considering) zero hours contracts is the uncertainty the casual contracts provide. For those claiming benefits, they fear that if they don’t have regular work, they will then have to go through the process of re-signing on and will face financial hardship in the interim period while their claim is reassessed.

Without regular hours from week-to-week and month-to-month, it can be a challenge to budget and plan ahead for financial commitments. Many workers report that their hours are cancelled at short notice or they have to hang around waiting for the phone to ring. This can make arranging childcare or other family commitments tough, and with many workers living in fear that if they decline hours, they will then not be a priority for the next offer of work. Even planning an afternoon trip or a day out becomes an almost impossible task.

With the upcoming elections, we are hearing lots of promises from MPs to entice us to vote for them and Ed Milliband is very much pushing zero hours contracts to the forefront of our minds. His Labour government are promising to put a stop to the worst abusers of the system (the hiring organisations) by introducing the right to compensation for workers if their shifts are cancelled at short notice. They are also promising abolish exclusive contracts and state that they will ensure that workers will not be obliged to be available outside of the contracted hours. We’ll see…

The Pros of Zero Hours Contracts

On the flip side of the coin, there are pros to being on a zero hours contract. There’s the flexibility for starters – if you won’t be penalised for declining hours of work, and are not solely dependant on the regular income – the irregularity of work can free up time to do something else. Many employers and workers enjoy this flexibility, and for some, this can work particularly well, such as students, parents (fitting around school holidays), seasonal workers and those with more than one job or source of income. If taken advantage of in the right way, zero hours contracts can provide a clever use of your time.

Just like any job, regardless of the hours and salary, it’s what you make of it. Are you better staying on benefits or accepting a zero hours contract, which can help to build up your CV and get you back out there into the big, bad world? Everyone has a different situation, so I am not sure if a one-size-fits-all approach will work, however, work is work, so surely doing something is better than nothing in the grand scheme of things? A zero hours contact doesn’t lock you into a life of staying with the same company. You could accept the role until something better comes along.

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