Benefits risk to jobseekers refusing zero-hours contracts

Jobcentre The government says people should "do everything they can" to find work

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Jobseekers risk losing benefits if they turn down certain zero-hours contracts without good reason, the government has said.

The change comes with the incorporation of income-based jobseeker's allowance into the new universal credit system.

People claiming jobseeker's allowance had been able to refuse to accept such jobs without facing penalties.

But under universal credit, which is being rolled out gradually, people will have to accept the casual contracts.

Zero-hours contracts, which allow employers to hire staff with no guarantee of work, are popular with many companies because they offer flexibility.

But critics say they can leave workers with little financial stability or security, few employment rights and not enough work.

The government says such contracts offer an average 25 hours work a week and can be a good means of gaining experience.

Start Quote

It is right that people do everything they can to find work and that we support them to build up their working hours and earnings”

End Quote Department for Work and Pensions

A spokesman said that when workers did not get the hours they needed, their universal credit payments would adjust automatically to ensure they were financially supported.

Labour said the government should focus on stopping abuse of workers through zero-hours contracts rather than on forcing claimants to accept such working arrangements.

Shadow work and pensions secretary Rachel Reeves said: "The growth of zero-hours contracts and the exploitative use of them has got to be cracked down on."

She said jobseekers should be able to choose whether to accept zero-hours contracts and "shouldn't be forced into taking a job" that was unsuitable.

She said the government had questions to answer about "who exactly is at risk of losing benefits for refusing to take a zero-hours contract job".

Under the new scheme, claimants who turn down such a contract when it is thought to be suitable could lose payments for more than three months.

Employment Minister Esther McVey outlined the change in a letter to Labour MP Sheila Gilmore about benefits sanctions, the Guardian has reported.

The newspaper said Jobcentre "coaches" would be able to "mandate" zero-hours contracts if they thought the role was suitable for the claimant.

Jobcentre People face losing their benefits for more than three months if they refuse zero-hours contracts

A spokesman from the Department for Work and Pensions said claimants needed to do everything they could to get work.

He said jobseekers would be expected to take "reasonable" zero-hours contracts and carry on looking for permanent full-time work in the meantime.

They would not be required to sign up to "exclusive" contracts, which tie a worker to a single employer with no guarantee of work.

He said: "As now, if there's a good reason someone can't just take a particular job they won't be sanctioned.

"But it is right that people do everything they can to find work and that we support them to build up their working hours and earnings."

He said the average zero-hours contract provided workers with 25 hours of work a week and could "lead to long-term opportunities".

  • One in five employers has at least one employee on a zero-hours contract
  • Staff have no guaranteed hours
  • They are entitled to holiday pay
  • The contracts are often used in retail and in the hospitality sector

"Universal credit payments will adjust automatically depending on the hours a person works to ensure that people whose hours may change are financially supported and do not face the hassle and bureaucracy of switching their benefit claims," the spokesman added.

Ms Gilmore said while she did not object to the principle of either universal credit or zero-hours contracts, she was "concerned" by the policy change.

"I also fear that if people are required to take jobs with zero-hours contracts, they could be prevented from taking training courses or applying for other jobs that might lead to more stable and sustainable employment in the long term," she told the Guardian.

Unions last week called for action against zero-hours working.

This followed a study that showed around 1.4 million jobs involved contracts that did not guarantee a minimum number of hours.

The Office for National Statistics said most of the contracts were zero hours.

Under these contracts, people are not guaranteed work from one week to the next. But officials have pointed out that some workers could have more than one contract at a time.


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  • rate this

    Comment number 31.

    For me the issue with zero-hours contracts is that it's all one-sided. The employer gets the benefit of not paying when you're not needed but can insist you're always available (the "exclusivity" clause), thus unable to work anywhere else. Surely demanding your time is a form of employment and should thus be renumerated?

  • rate this

    Comment number 24.

    I am opposed to zero hours contracts as they amount to casual labour only, not full time employment. Unemployed or not, no one should be subjected to these contracts that ride roughshod over basic employment protection and rights.

  • rate this

    Comment number 10.


    Just one more way for Cameron to stand up in the commons and say unemployment is falling, when in the real world we all know its not


  • rate this

    Comment number 2.

    If only the real culprits in this crisis were on zero hours rather than massive bonuses.

    Shameful abuse of the poor and our government selling out to wealthy and highly profitable corporations.


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