Working under variable working hours contract and unemployment security

Zero hour contracts, short term and part-time work as well as other atypical employment relationships have increased at workplaces. Amendments to legislation that entered into force in June concerning the variable working hours contracts and a comprehensive reform to the Working Hours Act currently under consideration in the ministry reflect the need to react to ongoing changes in work culture. Further, the activity model has increased the pressure to receive jobs that are atypical in nature. The increase of atypical work has lead us to new questions also at the unemployment fund. We must consider how do these changes affect the unemployment security and what needs to be taken into consideration.

What does it mean to work under variable working hours contract?

Zero hour contracts have neither been defined in law nor has the content been established in common language. Usually they refer to an employment contract in which no minimum working hours has been agreed on and the working hours vary from zero to forty hours. The contract is a bad one for the employee, because the employer has the right but not the duty to offer more work than the minimum working hours originally agreed in the contract. Zero hour contract is part-time and open-ended by nature. In another form of a variable working hours contract so-called guaranteed working hours have been set which the employer has committed to offer. A maximum limit to the working hours has also been set in the contract.

These two forms of variable working hours contracts must be discussed separately from work on-demand contracts. Employees that work on-demand are also called as “extras”. In these cases, an employer has hired several employees who work under temporary job contracts, that is, framework contracts. As for framework contract, it is not an employment contract per se, but an agreement of the conditions in employment relationship when the temporary employment relationship is agreed on. In practice, a single workday or a shift may constitute a fixed-term employment relationship when working under framework contract.

What practical value does the changed legislation offer to an employee?

To begin with, as soon as the law enters into force the employee has the right to demand that the shifts are recorded in the roster. The roster must be delivered a week before the shifts start at the latest. Pay for the sick leave must be paid, if the shift has been recorded in the roster or it has been agreed upon otherwise.

If the employer does not provide the working hours recorded in the roster, the employee can claim for the unpaid salary to be paid. However, if the employee working under variable working hours contract does not receive the offered shifts, the unemployment fund is obliged to reject application because in this case the member has made his or her working hours shorter. Free time is not meant to be compensated by unemployment allowance.

Another innovation in the amendment is that the employer has the obligation to pay salary for the notice period to the employee working under zero hour contract. The salary for the notice period is equivalent to the average pay one has received for the last 12 weeks before his last shift, if the employer has offered work less than what had in average been offered for the 12 weeks preceding the notice period.

This is good news, because the unemployment fund may have had to reject member’s application for the notice period even though the salary for the notice period might have been quite low. In practice, it was possible that the employer may have discontinued the contract and at the same time offered no more shifts.

In future, employee working under zero hour contract can resign without the fear of suspension period set by the TE Office, if in the preceding 12 weeks no working week lasted over 18 hours. Previously small amount of work even when working under zero hour contract was not deemed as a valid reason to resign from a job. Hence it has been practically impossible to disassociate oneself from the zero hour contract, because the benefit for three months would have been rejected even if the employer would not have offered any work for a long time. Obviously, there is room for improvements as the amendment focuses only on zero hour contracts and does not involve those working under 10-20 h/week contracts.

Due to the amendment the employee is entitled to request a change to the condition related to working hours that is written in the employment contract, if the working hours have stabilised to hours other than what was originally agreed on within the last six months as the law came into effect. If the need for labour varies between 20-30 hours, it is not possible to agree on a zero hour contract.

Kaisa Tikka

Benefit Manager

Read also