Been offered a zero hours contract? Discover what it entails and why they are becoming so popular despite the problems involved.
From the 1960s there have been employment agencies. Generally, these were useful establishments where people could find both temporary and permanent jobs. These employment agencies catered for office staff and factory workers with many temporary positions. The positions often lead to full time permanent jobs that offered a chance to move up the career ladder. Following the financial turmoil of 2008, the lack of jobs in the UK has meant that many agencies find work for the unemployed. This includes skilled workers in IT and trained drivers with HGV licences. These were once sought after employees, but they are finding work through agencies. There has been a steady increase in agency work that has begun offering lower pay. Many people are employed on zero hours contracts.
What is a zero hour contract?
A zero hours contract is a type of contract where an employer or an agency is not under any obligation to offer work. In return employees are not under any obligation to accept work. Working with a zero hours contract does give the employee some worker’s rights. However, if there is a break in the working schedule then these rights can be lost. Those workers who are on this type of contract are entitled to the National Minimum Wage. In addition, employers and agencies cannot insist that employees work only for them. It is estimated that somewhere between 800,000 and 1.5 million people in the UK work under these flexible contracts. This means that an increasing number of people have no set hours per week. They also do not know from one week to the next how much they will earn.
Advantages of The Zero Hours Contract
A flexible schedule
For some families with small children, working from home under a zero-hour contract gives more flexibility than any other job. It allows parents to work whilst children are in daycare. However, agencies that find work for people under this kind of contract offer little in the way of protecting the normal obligations. Most of these employers do not provide holiday pay and sick pay.
A temporary income
Zero-hours contracts are helpful for students. They may want to work in their spare time, i.e. during the summer holidays and at Christmas. These contracts are also good when you are in between jobs and looking for permanent employment and can be a much-needed source of temporary income instead of resorting to short term loans.
Work experience
Working under a zero-hour contract can be a great way to gain work experience. A flexible work schedule can provide you with just enough work experience to decide whether you want to pursue a job in this career. At the same time, since you’re also allowed to have other jobs, you can gain work experience in multiple positions and different work environments. This will help you choose the career path that best suits you.
An increased chance for a permanent job
If an employer can’t currently offer you a full-time position, they may be willing to take you on under a zero-hour contract. This gives you a chance to prove your worth to the company by delivering quality work and being available at short notice. An excellent work ethic and job performance may result in the company offering you a full-time position.
Disadvantages of Zero Hour Contracts
Lower income
Apart from being unable to plan your schedule, the irregular and fluctuating work hours accompanying a zero-hour contract also make it challenging to plan a budget. Zero Hour contract workers also often earn lower pay than their counterparts who have a regular employment contract. Research shows that there is some argument that casual employment leads to a permanent job. However, only 44% of contracts last for more than two years. There is a bank of workers in the UK who never build up any holiday pay or sick pay. In addition, employers do not spend time training these people. This creates a lower standard of skills in the workforce.
Unpredictable work hours
Although a flexible work schedule may give you the freedom to choose when you want to work, it can also limit your ability to plan your life. Even if you don’t have to accept work, if the work trickles in, you may find you need to take it when it comes. Not knowing when work will come in can affect your ability to make arrangements in advance.
Agencies Commission
The pay for workers on zero hours contracts may be only the minimum wage. Agencies will have to take out their commission from the amount that the employer pays the agency to find workers. With this method of employment, employers do not have to pay out National Insurance. They do not have to deal with PAYE and can ask for workers as and when they need. From the point of view of the agencies, they receive a good hourly rate of pay for supplying workers. They often demand that people on their books are available every day even if they may not need them. As the chances of an unemployed person securing a full time permanent job lessens, many people feel that they have no alternative but to accept the low wages on offer for jobs that should be skilled.
Changing Work Patterns and Pay
The rise in the number of zero hours contracts has resulted in a change to patterns of work for many people. In the past a permanent employee could depend upon set hours and a set basic wage on a fixed payday. However, those now employed under the new system find it difficult to plan even a week ahead. There are many people who work only for one employer under this form of contract. In many cases, if they are not available for work when required, they can find themselves being offered fewer shifts. So, although in theory an employer can no longer demand exclusivity, in the real world if you do not turn up for work when required you could find yourself cold shouldered in favour of someone who is always available. The constant pressure of being in this kind of employment has also had an impact on earning power. It has been one of the causes of lower wages being offered.
ConclusionThere is one main concern about the increase in low paid jobs secured under zero hours contracts. This is that a substantial number of people are in a situation where they have no regular employment. This could in turn lead to the young people of the UK being in an even worse position in the future. It could also lead to the work force in the UK becoming under skilled just at a time when the country needs skilled workers the most.
