Citizens Advice warns on zero hours contracts

Ahead of a debate in Parliament on Tuesday, Gillian Guy Chief Executive of Citizens Advice said:

“A zero-hours contract does not mean zero responsibility for employers.  We see too many people who are denied work because they become pregnant or suffer an illness.  Unscrupulous employers can also use zero-hours contracts to deny holiday or redundancy pay. This is not fair.

“Zero-hours contracts can also mean fluctuating incomes that cause havoc with people’s benefit claims, denying them much-needed income when the hours dry up.  Universal Credit will make an important difference to help stabilise the income of people in this sort of precarious work.

“We’d like to see flexible contracts come with minimum hours or minimum pay agreements. Clarity around redundancy and holiday pay would be a first step towards stopping this out-dated exploitation that has no place in the Twenty First Century.”

Evidence from the Citizens Advice service shows:

• workers can be "dismissed" with little or no due process.
  Employers rarely dismiss a zero hours worker - they are simply told there is no work for the time being.  This leaves workers  unsure of their position, and whether they should or can claim benefits.  Although it is possible they may be able to claim unfair dismissal or redundancy pay, the fact that they believe they may get further work can mean they do not seek advice for several weeks at which point it may be too late to try to make a claim.  

• Workers are susceptible to abuse of their basic rights e.g.. no holiday pay.
  Confusion about holiday rights for casual workers is not surprising given that there are no clear rules for determining entitlement for casual workers.  

• Some employers offer zero hours contract as the only option to existing staff who request more flexibility in hours because of care commitments or who want to continue working beyond a retirement date

• Pregnant workers may have their hours reduced

• Workers are liable to having their hours reduced to zero if they take time off sick

• Fluctuations in income can wreak havoc with claiming crucial benefit payments

Zero hour workers:

Are subject to sudden fluctuations in income making it difficult to budget

Have difficulty claiming "in work" benefits such as working tax credit because there is no guarantee of minimum hours.  For JSA a claimant must not be in 'remunerative work' meaning at least 16 hrs per week (or 24 for a couple) and for Working Tax Credits they must be in remunerative work of at least 16 or 30 hrs per week depending on their circumstances.  Where hours fluctuate, they can be averaged over whatever period gives the best reflection of normal working hours.  However significant variation in hours can mean individuals alternate between benefits. They can generate overpayments and with that, the recently introduced civil penalties.

Experience significant fluctuations in income as individuals have to repeatedly send evidence of changing income for their benefit claims.  In weeks of "no income" they can find that it is several weeks before they receive a benefit payment for that week, even if they are permitted to claim.   

Find it difficult to rent in the private sector because landlords and agencies regard them as at risk of rent default if they have no guaranteed income.

Case studies:

Our client worked for 11 years as a care worker working regular weekly shifts throughout that time but on a zero hours contract.  When the homes that he worked at closed down his employer told him he wasn't redundant because they would look for work at other homes.  However because he was on a zero hours contract he received no pay whilst work was sought.  Despite asking several time for redundancy pay he was left in limbo with no income.

Our client has worked on a zero hours contract, working 40 hours per week, for 14 months.  She informed her employer that she was pregnant and her hours have been reduced in stages until she now works only 11 hours per week. Employer has  taken on 2 other staff but hours were not offered to our client.  She believes this is so that employer does not have to pay Statutory Maternity Pay as her pay will be below the lower earning limit.

Our client works for an agency and has a zero hours contract. Initially he was provided with 5 days work per week but this has decreased and recently he has been offered anything from 2 days to 4 days per week. This has played havoc with his benefit situation. He receives working tax credit if he works 4 or 5 days but not if he works 2 or 3. His housing benefit claim is also constantly changing. Unless he gets 4 or 5 days work he is worse off in employment than when he is not working at all.

He says he has been told by the Job Centre Plus that if he leaves his job he will be sanctioned for 6 months.

The client says that he got the job via a Job Centre Plus advert which is still online. It was described as "full time, temporary". The client says that he would not have taken the job if he had realised that it was not genuinely full time.

The client is also unhappy because he tried to claim reduced JSA for the weeks when he only worked 2 days but was turned down because he did not attend interview. The client says that this is because he was in work again by the time the interview was scheduled and that he was required to produce a written statement from his employer saying that they could not employ him full time that week - which they declined to give.

Notes to editors:

1. The Citizens Advice service comprises a network of local bureaux, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
2. The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
3. To find your local bureau in England and Wales, visit citizensadvice.org.uk. You can also get advice online at adviceguide.org.uk
4. You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers
5. Citizens Advice Bureaux in England and Wales advised 2.3 million clients on 5.4 million problems from October 2013 to September 2014. For full 2013/2014  service statistics see our quarterly publication Advice trends
6. Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 3,000 service outlets across England and Wales.