Zero-hour contracts have sparked a lot of debate internationally in EU organisations and at the ILO as well. Should they be banned and enact a minimum number of working hours or not? This is my blog post on the situation in Finland (released on 5 March 2015) translated into English.
A mixed bag of people work on zero-hour contracts
Zero-hour contracts seem to have become a permanent type of employment contract on the Finnish labour market. Currently, good 100,000 people work on zero-hour contracts.
Just like with any other type of so-called atypical employment relationships, one should ask whether zero-hour contracts are a sign of a weak labour market position or whether they suit the life situation of those working on zero-hour contracts and bring desired flexibility into their jobs?
In 2018, around 40 per cent of employees working on zero-hour contracts said that they had wanted a flexible contract and, correspondingly, around 40 per cent reported that the work in question was only available on a zero-hour contract. In addition, some 15 per cent felt that no other work had been available.
This division alone is not sufficient to describe what kind of group we are talking about when we talk about employees working on zero-hour contracts. They seem to be quite a mixed bunch.
We can distinguish as many as five different groups from this mixed bunch (see figure). I have utilised the Labour Force Survey’s data on what a person considers to be his or her main activity in the grouping.
Group one is formed by those whose main activity is studying, even if they also work. They made up around one-third (31%) or 33,000 of employees working on zero-hour contracts in 2018.
Nearly all of them (94%) work part-time and the reason for working part-time is studying (91%). Only one-quarter wanted more working hours. So, it is no wonder that a majority of this group (56%) had wanted a zero-hour contract themselves.
For them, working can be described as flexible, as around one-quarter hardly knew at all or only a few days in advance the timing of their upcoming working hours.
The second group was pensioners or disabled people. They represent nine per cent of those working on zero-hour contracts, or 10,000 persons.
Nearly all of them worked part-time (91%) and the reason for working part-time for most of them (84%) was “other reason”. Likewise, a clear majority, or 77 per cent, had wanted a zero-hour contract themselves and most (84%) did not want more working hours. Close on one-third did not know their future working hours for more than a couple of days ahead. A majority of this group were men (66%).
For the two groups described above we can justifiably deduce that zero-hour contracts are not that problematic but a form of employment contract that suits their life situation.
The third group is those working full-time, for whom paid work is the main activity. They represented 20 per cent or employees working on zero-hour contracts, around 21,000 in 2018. A majority (79%) did not want more working hours.
Compared with the previous group, a clearly smaller share, 33 per cent, had wanted a zero-hour contract themselves. Even though these people work full-time, a relatively large share (30%) hardly knew at all or only a few days in advance the timing of their upcoming working hours.
This could be, for example, working as a substitute school or kinder garden teacher or in the transport industry. So, you work full-time but often do not know in advance when you will be working. A majority of this group were men (61%).
The fourth group is persons working part-time, who report that paid work is their main activity. The represent 34,000 or around one-third (32%) of all employees working on zero-hour contracts.
For around one-half, the reason for part-time work was lack of full-time work and around one-half would have wanted more working hours. A clear minority, or 29 per cent, had wanted a zero-hour contract themselves. A similar share did not know their future working hours for more than a couple of days ahead.
The fifth group clearly differs from the others; it consists of some 6,000 persons and people in this group consider themselves unemployed rather than employed. Nearly all worked part-time (96%) and lack of full-time work was the reason for part-time work for almost everyone (96%).
Only one in ten had wanted a zero-hour contract themselves and as many as 60 per cent said that working on a zero-hour contract was the only work available, and 77 per cent of them wanted more working hours. There were roughly equal amounts of women and men. Persons belonging to this group seem to scrape their livelihood together in a highly uncertain situation and they truly would like to work more.
This examination shows that persons working on zero-hour contracts are in very different life situations. The group includes, on one hand, students and pensioners for a majority of whom this type of contract is fine. On the other hand, the group contains both full-time and part-time employees. For them, paid work is the main activity and a different type of contract would be preferable.
The divergence of the group makes legislation challenging. While this type of contract creates possibilities to work flexibly for some, for others it creates uncertainty, so it is not easy to decide to what extent to restrict zero-hour contracts.
Anna Pärnänen works as Senior Researcher at the Population and Social Statistics Department at Statistics Finland.