Zero-hours contracts on the rise

26 February 2015 
UK companies used 1.8 million zero-hours contracts last summer, Office for National Statistics (ONS) figures show. This has increased from last January’s 1.4 million.

26 Feb 2015| News

26 February 2015

UK companies used 1.8 million zero-hours contracts last summer, Office for National Statistics (ONS) figures show. This has increased from last January’s 1.4 million.

On average, someone on a zero-hours contract works around 25 hours a week – compared to 37 hours per week for those not on the contracts. A third of them say they want more hours.

These latest statistics from the ONS shine a harsh light on last week’s which showed unemployment falling. More jobs there may be, but when they are low-paid and low hours, we must question their quality, not just their quantity. The trends that started in the recession are failing to be reversed in the recovery.

Zero-hours contracts permit an employer to pick and choose a worker’s hours depending on demand. This allows them to maximise profits while the worker is not guaranteed any hours, financial stability or sick pay and benefits. The flexibility of ZHCs benefits only the employer.

In their book Re-regulating Zero Hours Contracts, Simon Deakin and Zoe Adams state that:

“Rigidities in employment law and the operation of the tax-benefit system, together with the effects of recession, are responsible for the recent rise in zero hours contracting.

“The Coalition government’s solution to the problems posed by zero-hours contracts is to outlaw so-called exclusivity clauses, under which a worker agrees not to work for other employers while a zero hours contract or arrangement is in force. This is a red herring as the vast majority of such clauses are unenforceable at common law.”

The rise of ZHCs is rapid, widespread and incredibly concerning.

TUC General Secretary Frances O’Grady said:

“Zero-hours contracts sum up what has gone wrong in the modern workplace.

“They shift almost all power from the worker and give it to their boss. Anyone on such a contract has no guarantee of any work from one day to another. Put a foot wrong, and you can find yourself with little or no work.

“Employers often argue that they offer flexibility, but trying telling that to zero-hours workers who can’t get a mortgage or pay their rent.

“In many sectors, especially social care, zero-hours contracts are used to drive down costs regardless of the impact on services and the workforce.”

Chuka Umunna, the shadow business secretary, said: “Ministers have watered down every person’s rights at work and zero-hours contracts have gone from being a niche concept to becoming the norm in parts of our economy.”

TUC research shows that:

  • Zero-hours workers earn £300 a week less, on average, than staff on permanent contracts.
  • Two in five zero-hours workers are paid less than £111 a week and do not qualify for statutory sick pay.
  • Short-term and insecure working patterns mean many zero-hours workers do not work continuously with one employer for two years. As a result, many miss out on statutory redundancy pay, the right to return to their job after maternity leave and protection from unfair dismissal.

The TUC has previously released a report, The Decent Jobs Deficit – The Human Cost of Zero-Hours Working in the UK, which details the proliferation of precarious employment, low pay, exploitation and casualisation.

The report notes, “Of particular concern has been the sharp increase in zero-hours contracts and the widespread use of agency workers in the aftermath of the recession. Too often workers on such contracts face working conditions better suited to the Victorian era than 21st century Britain”. The TUC is calling on the government to “challenge precarious employment and introduce policies to encourage the creation of decent jobs, on decent hours and pay”.

Among its policy recommendations, the TUC stresses the need for improved employment rights for zero-hours contract workers and others on casual contracts, and better access for all workers to union representation and collective bargaining. The IER agrees that the best way to improve working conditions, to reduce income inequality and to create a strong economy is through collective bargaining.

To find out more about collective bargaining, the IER’s Reconstruction After the Crisis: A Manifesto for Collective Bargaining is available for purchase. Watch Keith Ewing and John Hendy explaining what collective bargaining is, and why we need it here.

For more information on zero-hours contracts, Re-regulating Zero Hours Contracts is available now.