Are Zero Hour Contracts Coming to an End?

End of Zero Hour Contracts

A recent report from the Office of National Statistics (ONS) announced that in 2016, 199,000 individuals from the food and accommodation industry were on a zero hour contract. Although this is a slight increase from the previous year, overall the UK hospitality sector now holds less zero hour contracts than it did in both 2015 and 2014. Could this suggest a slow end to flexible working in the sector?

For several years, hospitality businesses have used zero hour contracts to manage fluctuations in consumer demand, especially during busier or seasonal periods. This allows employers to gain access to temporary staff without having to guarantee hours and only ever needing to give minimal notice.

Unsurprisingly, the ONS revealed that overall, zero hour contracts are a popular option for businesses. The figures show the increase in contracts over the last few years:

  • 699,000 in 2014
  • 804,000 in 2015
  • 905,000 in 2016

In 2015, the accommodation and food industry accounted for 23.6% of the entire zero hour employment market. In 2016, 190,000 individuals from the sector were on zero hour contracts, a total of 22%. Yet, this percentage has dropped massively from 2014 where the industry claimed over 53% of the entire zero hour contract market.

Are zero hour contracts becoming less popular?

Without fail, the hospitality sector still employs the largest number of individuals on zero hour contracts when compared to any other sector. Yet one of the largest backlashes that the sector faces is how unbeneficial these working contracts are for the employee. Zero hour contracts are seen as financially unstable, unreliable and too much pressure. As a result, many businesses in the sector offer other flexible working contracts such as fixed term work, agency workers, apprenticeships or internships.

With this being said, there is no getting away from the fact that zero hour contracts are a great way to reduce expenditure. According to the Economist, over 80% of the UK’s GDP comes from the service sector, with hospitality based businesses introducing zero based contracts to more than half of all firms, which enables:

  • Businesses to manage demand during hectic times of the year
  • Smoother transition of staff from full time to part time or from part time to full time
  • Flexibility for businesses and individuals
  • Benefits professionals or trade industries who regularly move around for work

Zero hour contracts are still a cost effective option for many businesses, especially those with fluctuating periods. To discuss this article in further detail or for more information, contact Adam Moody at adam@raffingers.co.uk.