Financial News

  • 6 May 2014, 21:23

Refusing Zero-Hours Contracts Risks Benefits

Job hunters face losing their benefits if they refuse to take certain zero-hours contracts under the Government's welfare shake-up.

Claimants failing to take up such jobs without good reason risk having their payments docked for more than three months.

Under the casual contracts, people may not know if they have work from one week to the next.

Employment Minister Esther McVey outlined the change in a letter to Labour MP Sheila Gilmore about benefit sanctions, reports The Guardian.

Jobcentre "coaches" will be able to "mandate to zero-hours contracts" if they think the role is suitable for a claimant.

Labour leader Ed Miliband has pledged to change what he branded the "worst abuses" of zero-hour contracts.

Recent research showed about 1.4 million jobs involve contracts that do not guarantee a minimum number of hours.

A study among employers showed 13% used non-guaranteed hours contracts, rising to almost half in the tourism, catering and food sectors.

Their growth has prompted trade unions to warn of a "growing sub class" of insecure, low-paid employees.

A Department for Work and Pensions spokesman said: "With Universal Credit, claimants will not be required to sign up to exclusive zero hours contracts.

"As now, if there's a good reason someone can't just take a particular job they won't be sanctioned.

"But it is right that people do everything they can to find work and that we support them to build up their working hours and earnings.

"The average zero hours contract provides workers with 25 hours of work a week - and can lead to long-term opportunities.

"Universal Credit payments will adjust automatically, depending on the hours a person works, to ensure that people whose hours may change are financially supported and do not face the hassle and bureaucracy of switching their benefit claims."

Labour's Shadow Work and Pensions Secretary Rachel Reeves said: "The huge increase in zero-hours contracts under the Tory-led Government is another sign of their failure to tackle the cost-of-living crisis and deliver a recovery that works for everyone."

TUC general secretary Frances O'Grady said: "Forcing people into uncertain employment is not the answer to unemployment and may restrict the ability of claimants to seek secure, permanent work.

"We know that for many workers zero-hours contracts mean zero job security, poor pay and no way of knowing what they'll be earning from one day to the next."

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