Zero-hour contracts used by employers to silence poorly treated workers, study shows

26 June 2013

A new study from the Resolution Foundation has revealed some employers use zero-hour contracts as a way of scaring their workers into silence in the face of abuses or unfair treatment.

The research – named A Matter of Time – partly involved interviewing workers who are on zero-hour agreements, under which they are not guaranteed regular work but may be ‘called in’ to their jobs at any time. The report found evidence of the contracts being used unfairly as a ‘management tool’, as staff are at threat of having their working hours cut, and thus losing significant income, if they raise a complaint. Some employers are even using zero-hour contracts as a way of escaping redundancy payouts, it was suggested, with bosses choosing to “zero-down” hours instead of formerly making employees redundant.

In addition, the authors found that some employers use zero-hour contracts to escape the obligations they have to their staff under UK employment law when workers are given the full status of employee.

Even if those on zero-hour contracts are given regular work, the study showed that those in such jobs work only 21 hours per week on average compared with 31 hours for conventional contracts; and they are typically paid £9 per hour (gross) rather than the £15 per hour average for those who are not on zero-hour contracts. The situational becomes worse for young people, with graduates on zero-hour contracts found to earn an average of £10 compared with peers on conventional contracts, who typically receive £20 per hour.

Senior analyst at the Resolution Foundation and co-author of the report, Matthew Pennycook, commented: “For many workers, zero-hour contracts mean a life of permanent uncertainty. They leave staff fearful of turning down work, unable to plan and budget for life away from work, and prone to having their employment rights undermined.”

Business Secretary Vince Cable recently announced the launch of a review into the use of zero-hour contracts, but the Institute of Employment Rights is sceptical of the outcomes that can be expected while Conservative Party members have such power in government. It is certainly unlikely that the contracts will be banned: the solution many trade unions have called for.

Deputy Chief Executive of the Resolution Foundation and co-author of the study, Vidhya Alakeson, reiterated that the outlawing of the agreements is improbable, but provided suggestions on how changes could be made to legislation to make the current situation more fair.

“We could insist that all job adverts offering zero-hours contracts make that entirely clear,” he said. “At the moment, the benefits they may bring for employers come at too high a price for those employed on them.”