A zero-hour contract is an employment contract in which the employer is not obliged to offer a single working hour to the employee. Hence, a work contract may have a clause on the range of working hours over a specified period of time so that the minimum working time is defined as zero hours (the working hours are agreed as 0–40 hours/week, for example). It is also a zero-hour contract, when under a work contract, employees will work when needed, i.e. when they are asked to work
In the legislation zero-hour contracts are counted among variable working hours. Variable working hours do not however refer to zero-hour contracts alone. An agreement of variable working hours can have a bigger than zero amount of minimum working hours defined. The range can therefore be e.g. 10–40 hours/week, with the minimum weekly working hours being 10 hours.
When can a zero-hour contract be signed?
The legislation defines when an agreement on variable working hours, including zero-hours contracts, can be made at the employer’s initiative.
If the employer has a fixed labour need, no agreement of variable working hours may be made at the employer’s initiative. The employer must give employees an account on the circumstances and the extent to which the employer has a need for labour.
No agreement may be made to the effect that the minimum working hours included in variable working hours would be fewer than required by the labour need. If the actual working hours over the preceding six months demonstrate that the agreed minimum working hours do not correspond to the employer’s actual need for labour, the employer must, at the employee’s request, negotiate an amendment to the working hours clause to correspond to the actual need.
The negotiation above must be undertaken within a reasonable time of the employee’s request. A reasonable time usually means about 1–2 weeks. The employee has the right to use an assistant, e.g. the workplace shop steward, in the negotiations. If the employer considers that the labour need has not been increased, the employer must present in writing grounds justifying the matter.
No limitations have been set for using variable working hours if the initiative comes from the employee. The initiative must then truly come from the employee, and the work contract should therefore give a reason for the zero-hour contract. Reasons for zero-hour contracts initiated by employees include e.g. studying.
Zero-hour contract and offering work
The employer is obliged to offer work in accordance with the minimum amount agreed in the work contract. For zero-hour contracts this means that the employer has no obligation to offer any work.
The Employment Contracts Act does, however, provide for the obligation to offer additional work. The employer must not hire new workforce for such duties that the part-time employees in the employer’s service could perform. The employer must hence offer work to its part-time employees first. The obligation also covers employees on zero-hour contracts.
Zero-hour contract and employees’ obligation to accept work
An employee on zero-hour contract has no obligation to work or to accept offered shifts. If the employer offers employees more shifts than what the minimum hours are, the employees must be asked no less than a week before drafting the shift roster how much and under what conditions they can accept work. Furthermore, if the regular working hours agreed in the employee’s work contract vary, the employer may, in addition to the working hours already entered in the shift roster, commission additional work only with the employee’s permission for each occasion or for a short period at a time.
Zero-hour contract and sick pay
If an employee working on a zero-hour contract has a shift entered in the roster and the employee is then ill, s/he has a right to a sick pay. There is also a right for pay when the shift has not been entered but has been agreed on in another way or it is otherwise clear that the employee would have been working had s/he been fit for work. In the latter case it can be a question of an established practice.
Zero-hour contract and notice pay
According to the Employment Contracts Act, if the work contract includes variable working hours and the work offered by the employer in the notice period falls short of the average amount of work in the preceding 12 weeks before the last shift, the employer must compensate for the loss of income due to the fewer working hours. There is however no liability to compensate if the employment lasted less than a month prior to the notice. In this kind of situation, no comparison is made.
The above applies to situations in which employees hand in their notice as well as to those in which the employer gives a notice. The purpose of the provision is to ensure that employees have a real notice period as the employment ends and that they have a right to a compensation corresponding to the notice pay, even if the employer did not offer work in the notice period.
Zero-hour contract and unemployment security
Employees on zero-hour contracts can get adjusted unemployment benefits during the employment if only little work is available.
In addition, according to the Unemployment Allowances Act employees have a justified reason to resign, if work has not been available in 12 calendar weeks immediately prior to the resignation so that the work could be considered as part of their previous employment requirement, and the work contract does not include regular working hours. What this means in practice is that the uncompensated time of unemployment security, i.e. the waiting period, is not applied if the employee on zero-hour contract resigns and, as a rule, a minimum of 18 hours of work has not been available in any of the last 12 weeks.
What risks can a zero-hour contract involve?
The problem with zero-hour contracts is e.g. the small number of working hours, which is reflected on pay and consequently on livelihood. In addition, planning one’s life can be difficult, if the number and time of working hours vary greatly. Even though employees are legally entitled to refusing offered shifts, in the worst case this can lead to work shifts not being offered at all in future. Hence, zero-hour contracts are strongly linked to insecurity.
In problem situations, trade union members can turn to the shop steward at their workplace. Moreover, many trade unions offer free legal counselling that the members can reach out to.
