Large employers such as Sports Direct, McDonalds and even Buckingham Palace have recently been 'exposed' as using zero hours contracts. So what are zero hours contracts?

What are zero hours contracts?

Zero hours contracts are generally contracts of employment between employer and worker with no minimum hours for the worker, and no obligation on the employer to provide any hours. It also means, in theory, that the worker is not obliged to accept the hours which are offered to them.

Workers are entitled to be paid the National Minimum Wage and like any other workers and employees, those on zero hour contracts begin to accrue annual leave as soon as they commence work. It is important that both the employer and worker are aware of the fact that a zero hours contract can make their relationship different to other employment contract arrangements.

Benefits

Some of the benefits of zero hours' contracts are:

• Provides a flexible workforce to meet a temporary or changeable need for staff
• Worker is not obliged to accept any of the hours offered
• Employers have access to a pool of staff to assist when demand arises
• No on-going requirement to provide guaranteed levels of work for staff
• Can be cheaper alternative to agency fees
• For employees, they can provide flexible employment on same basic terms as most workers
• No on-going requirement to accept offers of work and no consequences
• Gives employment experience and skills

Drawbacks

However, there are also some drawbacks:

• Workers are not sure about their working pattern from week to week
• Workers may not feel engaged with their employers organisation as a whole
• Employers might not have appropriate cover during busy periods if workers turn down shifts
• The ethical nature of the contracts is often called into question

These types of contracts are symptomatic of the global recession and are seen by some employers as a good way of decreasing unemployment numbers whilst reducing pressure on them to provide permanent set hours for employees.

It will be interesting to see if the government comes under pressure to prevent the use of zero hours contracts, despite the benefits they can have for employers and employees alike.