What should be taken into account before signing a zero-hour contract?

Zero-hour contract can refer to various types of contracts which stipulate working hours. The working hours specified in a zero-hour contract can vary between zero and 40 hours a week.

 

An employee who signs a zero-hour contract agrees to be available for work as required by the employer. Colloquially, these arrangements are usually not referred to as zero-hour contracts, but as “employees called to work on demand”, “on-call employees”, “extras” or “occasional workers”.

 

Previously, zero-hour contracts have prevailed in the service sector, but they are becoming increasingly common in the industrial sector, labour hiring and in fields where they used to be atypical. Often, the employees who are called to work on demand are students, or they have other sources of income. However, an employee who has entered into a zero-hour contract is tied to the employer and may not accept other work.

 

The salary and shifts of an employee with a zero-hour contract may be hard to anticipate. If there is no further agreement on working hours, the amount of work offered depends solely on the employer’s discretion. Employees with zero-hour contracts are unable to plan their finances on the basis of average income, because they cannot know how much work will actually be offered to them. Before signing a zero-hour contract, the employee should assess whether they will be able to cope financially, if they are not paid any salary. If the actual weekly working hours come to zero, the employee will not be paid any salary. It is advisable to agree on minimum weekly hours which provide sufficient income. 

 

Employers use zero-hour contracts to avoid complying with the regulations on the rights of employees provided in collective agreements and acts, including protection against the termination of employment and right to salary during illness. An employer may refuse to offer work to an employee who has called in sick, who has a sick child or who is pregnant. In addition to avoiding the payment of salary during illness, zero-hour contracts can be used to avoid the payment of holiday bonuses. When an employee has no time to earn annual holiday, they will not be paid holiday bonuses, either. 

 

Furthermore, employees with zero-hour contracts have insufficient protection against the termination of employment. The employer can avoid paying salary during the period of notice and the giving of notice altogether by offering zero hours of work. Any probationary periods will also become pointless, because the working hours can drop to zero anytime. It could be said that employees with zero-hour contracts are permanently on probation.

 

In some cases, the qualifying period for unemployment benefit of employees with zero-hour contracts is unreasonable. In theory, an employee might have to wait for months to be called to work without any obligation for compensation on the employer. However, low working hours are not considered a valid reason for resignation. Thus, the employee can be subject to a qualifying period even if they end their zero-hour contract on the basis of not having been offered work for a considerable time.

 

An employee with a zero-hour contract may be entitled to adjusted unemployment allowance, which means 50 per cent of the income he/she has earned in excess of the standard entitlement during the adjustment period is deducted from his/her earnings-related unemployment allowance. The adjustment period is one month or four weeks. When the adjustment period is one month, the standard entitlement is EUR 300. When the adjustment period is four calendar weeks, the standard entitlement is EUR 279. Adjusted earnings-related unemployment allowance is paid for each day during the adjustment period (5 days per week), unless there are other limitations to payment. The overall amount of allowance and income from work may not exceed the amount of salary the allowance is based on.

 

Adjusted unemployment allowance is claimed retrospectively from a period of one month or four consecutive calendar weeks. The payslip or salary certificate from the period must be appended to the application. When you start a new employment relationship, submit a copy of your employment contract or a written account of the central terms of your employment, issued by the employer, to the unemployment fund.

 

There are no legal definitions on zero-hour contracts. Therefore, answers to questions related to zero-hour contracts, such as their termination, cannot be found in current Finnish legislation.