Zero hour contracts: The pros and cons

Casual or zero-hour contracts are increasingly popular among employers, but before you agree to one it’s important to understand how it affects your rights. Even though you get minimum wage and statutory annual leave, you could miss out on other benefits. Here we explain how zero-hour contracts work and the main pros and cons.

What is a zero-hours contract?

If you’re on a zero-hours contract, you’ll be offered work as and when the company needs you. This means you could have different hours or days each week, and there may be periods where you’re not needed at all.

You don't have to accept any requests to work if they don’t suit you, but if you refuse the employer is under no obligation to offer you future hours.

You are not guaranteed work or a fixed income if you sign a zero-hours contract.

Advantages of a zero-hour contract

• Flexibility: If you are asked to work a shift that isn't worth your while, you can turn it down. This can quickly turn into a con though as employers don’t have to offer you future shifts. If you turn down a lot of work, you may find you’re offered fewer opportunities.

• Freedom to find extra work: If you aren't getting regular hours, you can look elsewhere. Exclusivity clauses in zero-hour contracts that restrict you from working somewhere else are now banned. To help you find extra work you can use gov.uk.

• More jobs to apply for: A zero-hour contract is often all a business can offer based on its own budgetary restrictions. This means you have a wider variety of job roles to apply for, and possibly a better chance to get valuable experience.

• Improve your CV: It's important to remember that any experience is positive, especially on your CV. When you apply for future jobs, employers will favour you if you have a continuous history of work experience compared to someone who hasn't worked for a prolonged period of time. Filling in gaps between permanent roles with zero-hours work may boost your chances of being hired.

• A chance of permanent work: Some companies reward hard-working zero-hour contract workers with permanent or fixed contracts. This means that working your socks off during your contract could help you land a steady income. Here is more on how to turn a temporary job into a permanent one.

Disadvantages of a zero-hour contract

• No fixed income: With no set hours, how much you earn will vary each week. While you might have lots of work one week you might find yourself with much less the next. In this situation, it's possible to find financial help through benefits. To find out what benefits you are entitled to visit the gov.uk website.

• Missing out on benefits: Working a zero-hour contract means you'll miss out on benefits that full time or permanent employees get as standard, like a pension and redundancy rights. This can leave you feeling undervalued, especially if you are working to the same level as those with extra company benefits.

• Constantly on call: Not knowing when you'll work can make you feel restricted, especially if you have more than one job, or other responsibilities. While you can't get set hours with a zero-hour contract, you could explain when you can work to your employer, to try to avoid being offered shifts you can't take.

• Damaging to your social life: If you don't want to miss out on work from your employer, you may find yourself waiting at home and turning down your normal social activities.

• Struggle with bills: Zero-hour contracts don't offer a stable cash flow. This means if you are short of work you may struggle to keep up with your household bills. Try to set aside some funds on the weeks when you have lots of work to cover the weeks where shifts are harder to come by.

What's the verdict?

Zero-hour contracts have both pros and cons, so it depends on if they suit your needs.

If you can focus on learning new skills and even if the job is temporary, you will continue to look employable and push yourself closer to a permanent job role.

If you feel that you are working hard and still not getting anywhere, our guide on working from home could give you an insight into ways to make money on your own.

Managing your money on a zero-hour contract

While working a zero-hour contract you can try to reduce your monthly household outgoings by shopping around for more cost-effective deals.

Free support for you

Working a zero-hour contract can be stressful and depressing, especially if you feel undervalued or unwanted by your employer.

While these feelings can hit anyone in any job role or social situation, it's important to know that help is available.

Here are some common free support helplines:

• Samaritans

• Helpguide.org

• NHS Choices

• Time to change.org