Zero-Hour Contract Analysis

Zero-hour contracts have always been a controversial issue. Initially, it started on the high street in sectors like fast food and retail (Jim 2013) and has since spread to other sectors including hospitality, higher education and health. According to Nye and Katy (2013), the zero-hour contracts have been on a rise since 2004 as shown below. The term “zero-hour” contract can be defined as a contract between an employer and an employee, stating that the employer is not required to grant the employee with any minimal working hours, and the employee is not required to take any of the hours provided. Notwithstanding the continuous rise in the use of zero-hour contracts over the recent years, there is hardly any precise research on the implications/effects

Zero-hour contracts are based on agreements in which the employees receive compensations for only the hours worked. Relationships between employers and employees in zero-hour contracts are quite different from other contract agreements. Zero-hour contracts may be suited for some people, such as people who are retired, students who are looking for additional earnings and can be flexible about when they work. On the other hand, zero-hour contract can be quite difficult financially for people who have families and responsibilities to take care of.
As stated by the Office of National Statistics (2014), half of the big companies in the UK use a total of 1.4million on zero-hour contract. Also 2% of the UK workforces are on zero-hour contract which represents 583,000 people. Furthermore, zero-hour contracts are most commonly used during economic recessions, during these period 16 to 24 year olds on these contract are two times more their initial number, for the reason that companies will need to avoid permanent workers in order to reduce their risk of failing during economic

From the view of the employers, zero-hour contract provides them with flexible labour force. The employers are able to change the number of hours that an employee is given per week, with that the employers are able to manage their cost in the sense that they can offer lower working hours when demand is low and higher working hours when demand is high, and furthermore to avoid overstaffing in quiet seasons and understaffing in busy seasons. An example can be a catering company who needs more workers to cover sudden or last-minute events. Also, other examples can be seen in press, the National Trust expresses that the zero-hour contracts are fundamental for them as a firm whose job is weather-dependent, they use zero hour employees to meet demand in seasons and evade obtaining service charges where the season and weather means that there is a decrease in demand (The week