Zero Hours Contracts seem to get a bad press. The impression being given that they are totally unacceptable and unfair to workers. That is an undeserved view.
It is true that sometimes Zero Hours Contracts can be abused. However there is also a general misunderstanding of some of the benefits. Many workers and employers are extremely happy with the way that these contracts work.
One example is where someone has another job and can occasionally be offered work by someone else. We have seen situations where a business provides training or lectures but these are not every day. Having a pool of people on Zero Hours Contracts means that, when work is available, those employees can quickly be contacted to see if they can fit in the work. There’s no compulsion to take work offered but it can be a source of decent extra income. We know of teachers, social workers, solicitors – even firemen and police officers who will earn a little extra from this, occasional, extra work.
Small business V’s large business
The ability to do this is advantageous to a smaller business wanting to grow. A large business offering training, for example, will have a reasonable number of full time, permanent, staff to cover all needs. A smaller business can’t afford to employ permanent staff. It can however, tap in to a pool of willing professionals and probably provide as good, if not better, service.
If Zero Hours Contracts were made illegal, as one political party has proposed, a business could operate in virtually the same way by offering a “temporary contract” for each piece of work. The problem with that approach is the extra work, and costs, involved in setting up a new contract for every piece of work. An employee would have to be re-employed, involving a new starter form, and details sent to HMRC. Then a P45 would have to be issued at the end of the contract with HMRC being notified. How much simpler to have a contract running where payment depends on work accepted.
Outlawing any form of compulsion in Zero Hours Contracts is probably enough to resolve the major criticisms. If a worker knows that work offered can be refused, without penalty or prejudice, it leaves the worker free to have several contracts in place and to select the work he or she wants to do.
Many thousands of people happily work under Zero Hours Contracts. It suits them and gives them flexibility. Banning them would be a retrograde step.
There is a misconception that Zero Hours Contracts somehow lead to a reduction in worker rights. This is not correct. A worker on a Zero Hours Contract has pretty much the same rights as a worker on a permanent contract. This most often manifests itself with disputes over holiday. A worker on a Zero Hours Contract is fully entitled to holiday pay. Our recommendation is that the contract stipulates that holiday will be taken immediately following the end of the period of work and paid then – and shown as such on payslips. This avoids any arguments later.