Zero-Hour Contracts More Common than Ever
17th November 2017
Zero-hour contracts are big news in the business world. They basically mean your employer doesn't have to offer you any minimum number of hours' work. On the other hand, you're not necessarily required to accept any work they do offer you.
Back in 2005, only about 100,000 UK workers were on zero-hour contracts. Between April and June 2017 the Office of National Statistics (ONS) said that 883,000 people were on contracts that do not guarantee work.
Are zero-hour contracts bad?
Zero-hour contracts have a pretty bad reputation in the UK these days. A lot of people think they're basically exploitative - or at least extremely precarious. Employers can theoretically deny you work, and therefore pay, as much as they like. There have been accusations of businesses using them as a weapon against their own workforce. In some cases, companies have abandoned them altogether because of the bad publicity they attract.
From the worker's point of view, there can actually be a few advantages to zero-hours contracts. For one thing, they can offer you a kind of flexibility you won't find in more conventional arrangements. Students, parents or carers, for instance, tend to find them pretty convenient. In many cases, they're actually not that different from being a self-employed freelancer.
Freelancers often take short-term contracts from employers, with no guarantee of work once the immediate agreement is over and they are self employed, which means they have to submit self-assessment tax returns. It can be a good way of working, and is pretty popular. The main difference is that zero-hour contracts still make you an employee. That means, although you don't work specific hours, you still get a range of rights and benefits.
Why are zero-hour contracts on the rise?
The financial crisis in 2007-08 led to a surge of zero-hour contracts. Employers were looking to cut costs wherever they could. Meanwhile, employees were more accepting of the contracts since the alternative was often losing their jobs altogether. On the other hand, some employees value not being tied to set hours when they have other commitments.
The government has been keeping a slightly cautious eye on zero-hour contracts for a while now. The possible exploitation of workers is part of their concern, but there's more to it than that. There's also a tax angle to consider. People on zero-hour contracts generally earn less than other employees, pay less tax and need more in-work benefits.
Can I still claim a tax refund if I'm on a zero-hour contract?
The short answer is yes, anyone who pays to travel in their own vehicle or by public transport to a temporary workplace can claim.
The slightly longer answer is that you'll need to be earning enough to be paying tax (so earning over the personal allowance threshold) and many people on zero-hours contracts don't earn over the £11,850. Give us a ring if you want to check or use our tax refund calculator. It's completely free to find out and you want to hang on to what's yours.
Should I be worried about my zero-hour contract?
Whether a zero-hour contracts suits you or not is a tricky question. In most cases, you'd either be more secure or better off on a more standard contract. However, if you're only looking for irregular or part-time work, then it could work out. According to the Office for National Statistics, though, about 1 in 3 zero-hour employees wants more hours than they're getting.
One thing to remember is that you're not completely at the mercy of your employer. In some cases, the hours you're working might mean you're not really on a zero-hour deal at all. An Employment Appeals Tribunal has ruled that working regular hours for a long time can count as a normal contract. Even if your written contract is a zero-hour one, your "true" contract has to reflect the actual hours you're working.
People aren't rushing into zero-hour contracts the way they were a few years back. Even so, there are still more people working under them than ever before. The taxman's not entirely happy about that. Are you?