A zero-hour contract is a type of employment agreement where an employer is not obliged to provide a minimum number of working hours, and the worker is not obliged to accept the hours offered.
Employees under zero-hour contracts are typically called in on demand, making it a flexible option for both businesses and workers.
These contracts are common in industries with fluctuating demand, such as hospitality, retail, and healthcare.
Under a zero-hour contract, the employer and worker relationship is highly flexible. The arrangement usually involves:
No guaranteed hours: workers may receive variable weekly or monthly hours.
On-call availability: employees are often expected to be available when needed.
Statutory rights: workers are entitled to minimum wage, holiday pay, and rest breaks, depending on local laws.
Payroll management: pay is calculated based on hours worked, with deductions for taxes and statutory contributions.
Flexibility for both parties: workers can accept or decline shifts, while employers can adjust labour supply based on demand.
Flexibility: allows employees to work irregular schedules.
Workforce agility: employers can scale staffing quickly to meet demand.
Opportunities for workers: useful for students, seasonal workers, or those seeking supplementary income.
Lower fixed costs: reduces overheads for employers compared to full-time staff.
Income uncertainty: workers may face unpredictable earnings.
Job insecurity: lack of guaranteed hours can create instability.
Overuse concerns: in some regions, heavy reliance on zero-hour contracts is criticised for exploiting workers.
Compliance issues: employers must ensure contracts adhere to labour laws in each jurisdiction.
Zero-hour contracts: no guaranteed hours; purely demand-based work.
Part-time contracts: guarantee a minimum set of hours each week or month.
At Mauve Group, we guide organisations through the complexities of employment models, including zero-hour contracts.
Through our Employer of Record (EOR) and global compliance services, we ensure businesses using flexible arrangements remain compliant with local labour laws while protecting worker rights.
Employer of Record (EOR): a service ensuring workers are legally employed on behalf of a business.
Gig economy: a labour market characterised by short-term and freelance work.
Independent contractor: a worker engaged under contract rather than as an employee.
Part-time employment: work arrangements with reduced, but guaranteed, hours.
Workforce flexibility: adjusting staffing levels to match business demand.
Labour law compliance: ensuring all employment agreements meet legal standards.