Q&A: What are zero-hours contracts?
What are zero-hours contracts?
Zero-hours contracts, or casual contracts, allow employers to hire staff with no guarantee of work.
They mean employees only work as and when they are needed by employers, often at short notice, and are only paid for the hours they work.
Some zero-hours contracts oblige workers to take the shifts they are offered, others do not.
Sick pay is often not included, though holiday pay should be, in line with working time regulations.
Who is on them?
Figures from the Office for National Statistics show that 250,000 UK workers are on zero-hours contracts. That represents around 1% of the UK workforce.
But a survey of employers by the Chartered Institute of Personnel and Development estimates that the real number is more than one million, with one in five employers having at least one employee on zero-hours.
It found that a third of voluntary sector organisations used zero-hours contracts, along with a quarter of public sector employers and 17% of private sector firms.
Recent high-profile cases include retailer Sports Direct, which employs 20,000 of its 23,000 workforce on zero-hours contracts.
Pub chain JD Wetherspoon has 80% of its staff on zero-hours contracts.
Cinema company Cineworld, a number of London councils, and Buckingham Palace are also among those using the contracts.
Why are they controversial?
There is concern that zero-hours contracts do not offer enough financial stability and security.
Some workers on zero-hours contracts are not being given enough hours. The CIPD research found that 16% of zero-hours workers said their employer often fails to provide them with sufficient hours each week.
Employees on zero-hours contracts also do not have the same employment rights as those on traditional contracts, and critics are concerned that the contracts are being used to avoid an employer's responsibilities to its employees.
The CIPD also warns that employers may take advantage of zero-hours contracts by using them as a management tool - offering more hours to employees that "behave" and fewer to those who cause trouble.
It is also concerned that things like mortgages and credit cards may be more difficult to come by without the guaranteed income of a traditional employment contract.
Dave Prentis, general secretary of the Unison union, also points out that the popularity of zero-hours contracts calls into question the government's unemployment figures. The suggestion is that zero-hours contracts mean people are counted as employed, when they are actually receiving insufficient hours and pay.
Why do employers use them?
Employers say zero-hours contracts allow them to take on staff in response to fluctuating demand for their services, in sectors such as tourism and hospitality.
Employers also say that many workers appreciate the flexibility a zero-hours contract gives them. Some 38% of workers in the CIPD research described themselves as employed full-time, working 30 hours or more a week, despite being on zero-hours.
Michael Burd, joint head of employment at the law firm Lewis Silkin, says the majority of employers use zero-hour contracts, not to avoid giving employees their rights, but to avoid paying fixed overheads and giving them flexibility over their workforce.
He points out that this flexibility is envied by employers in struggling economies like Spain and Greece, where potential costs may dissuade employers from taking on staff.