Zero-hours contracts must be a two-way street

Published on Jobs, Skills and Pay

Official estimates suggest that the number of people employed on a zero-hours contract – which provides no guaranteed hours of work – has risen from 134,000 in 2006, to 208,000 in the last quarter of 2012, and that 8% of workplaces in England and Wales now use zero-hours contracts. These figures are sure to be an underestimate. Many people are unaware they are on such a contract until their hours are unexpectedly cut back.

A fifth of employees on zero-hours contracts are in hospitality and retail, but new analysis by the Resolution Foundation shows that the largest number of workers on zero-hours contracts are in health and social care. In the domiciliary care sector alone, 150,000 workers are estimated to be on zero-hours contracts; that is more than half of all workers and eight out of 10 people employed by private care agencies.

These contracts are not restricted to low-paying sectors. They are increasingly used in further and higher education, and among clinical staff in the NHS.

Economists have been scratching their heads to explain why employment in the UK has held up but growth and productivity continue to be sluggish. Part of the explanation is that employees have been accepting lower wages as the price for holding on to their jobs, and zero-hours contracts are likely to have played a role. While such contracts have reduced the level of long-term unemployment compared with past recessions, flexibility comes at the employees’ expense where employers and managers are unscrupulous.

Employees on zero-hours contracts are less well paid than equivalent staff on permanent contracts and work fewer hours than they need. Hours may fluctuate week to week and everyday tasks such as paying rent and organising childcare can become very difficult. A domiciliary care worker we interviewed described how she was regularly working 55 to 60 hours a week. She is paid only for contact time with clients and that is assumed to be enough to cover travel time between clients and still comply with the national minimum wage. In addition, when she complained that she had too much weekend work, her manager cut her hours. This was a familiar story among the care workers we interviewed. They felt their card was marked if they refused hours.

Vince Cable, the business secretary, has ordered a review into zero-hours contracts. Our analysis shows these contracts become exploitative when the promise of hours is used as a reward or reprimand. In this environment, employee rights become meaningless.

The government’s review should seek to stamp out the use of zero-hours contracts as a management tool. This needs to start with a clear requirement that all jobs on a zero-hours contract must be clearly advertised as such. The practice of “zeroing down” employees to avoid redundancy payments must be stopped and there needs to be better information for employers about the statutory obligations they have towards employees on zero-hours contracts, such as holiday pay and the right to raise a grievance. If zero-hours contracts cannot function as more of a two-way street, allowing employees to manage their time around other commitments without fear of reprimand, calls for them to be banned will increase.

This article originally appeared in The Guardian