Tag: Zero Hours Contracts

Zero Hours Contracts: fair deal flexibility or a licence to exploit?

The Westminster government received more than 30,000 responses to their consultation on zero hours contracts which closed last week. Business Secretary Vince Cable acknowledged there has been ‘some abuse’ but said the controversial contracts do have a place in today’s labour market, but the TUC believes government proposals fail to tackle the exploitation of workers on zero hour contracts.

The Office for National Statistics estimates over 580,000 employers and individuals are currently using zero hours contracts, and that that number is on the increase.

The twelve week consultation was launched in December by Business Secretary Vince Cable, following a review of evidence on the extent of the use of zero hours contracts conducted last summer.

The consultation focused on two key issues that were raised in the summer review: exclusivity in employment contracts and lack of transparency for employees.

Commenting on the consultation, Business Secretary Vince Cable said: “It is clear that a growing number of people are using zero hours contracts. While for some they offer welcome flexibility to accommodate childcare or top up monthly earnings, for others it is clear that there has also been abuse around this type of employment, which can offer more limited employment rights and job security.

“We believe they can have a place in today’s labour market and are not proposing to ban them outright, but we also want to make sure that people are getting a fair deal. This is why we conducted research last summer (2013) and launched a consultation looking at the key concerns, such as exclusivity clauses and the availability of clear information.

“We don’t think that people should be tied exclusively to one employer if it unfairly stops them from boosting their income when they are not getting enough work to earn a living. We also want to give employees and employers more guidance and advice on their rights and responsibilities around these types of employment contracts. The consultation received a high level of interest, with over 30,000 responses. We will publish our response to the consultation in due course.”

However government proposals to clamp down on the abuse of zero-hours contracts will fail to stem the widespread exploitation of workers, according to the Trades Union Congress (TUC). Responding to the government’s consultation, the TUC submission highlights how zero-hours workers are dogged by low pay, under-employment, and job and income insecurity.

Half of all zero-hours workers earn less than £15,000 a year (compared to 6 per cent of other employees) and two in five want to work more hours, according to recent research by the Chartered Institute of Personnel and Development (CIPD).

Three-quarters of zero-hours workers report that their hours change each week. These varying hours – and the unstable, irregular income they provide – make it hard for staff to organise childcare, pay monthly bills and plan ahead, says the TUC.

The TUC is concerned that zero-hours contracts allow employers to evade basic employment rights such as maternity and paternity leave and redundancy pay, while some companies pressurise workers to remain available on the off-chance they will be offered work. None of the proposals contained in the government’s consultation deal with any of these problems, warns the TUC.

The TUC instead wants the government to introduce compensation, including travel costs, where shifts for zero-hours workers are cancelled at short notice, as well as written contracts with guaranteed hours where a zero-hours worker does regular shifts. The TUC would also like to see the government simplify employment law so that all workers get the same basic employment rights.

The submission supports the government’s proposal to ban exclusivity clauses – which prevent people from working for anyone else – in employment contracts, though this recommendation on its own will fail to meet the government’s stated aim of ending the abuse of zero-hours contracts.

TUC General Secretary Frances O’Grady said: “The growth of zero-hours contracts, along with other forms of precarious employment, is a key reason why working people have seen their living standards worsen significantly in recent years. These contracts are commonly associated with poverty pay, poor terms and conditions, and leave staff vulnerable to exploitation from bad bosses.

“We welcomed the government’s belated acknowledgement last year that abuse of zero-hours contracts needs to be stopped. It’s disappointing therefore that they’ve failed to back this up with any meaningful policies to tackle exploitation.

“If the government wants to be on the side of hard-working people it needs to put proper policies in place to curb exploitative working practices, even if this means ruffling the feathers of a few business lobbyists.”

The government’s response to the consultation findings will be published ‘in due course’.