Increase in zero-hours contracts reopens public debate

“It is important that the debate about zero-hours contracts is a balanced one, recognising that when managed well, these contracts can benefit both employers and workers,” says CIPD, in spite of anger from unions

The number of people employed on a zero-hours contract in their main job has risen, according to new figures released by the Office of National Statistics (ONS) yesterday.

The figure rose to 744,000 for April to June 2015, representing 2.4 percent of all people in employment. In the same period in 2014, this was 2.0% of all people in employment (624,000).

The research also revealed that, on average, someone on a zero-hours contract usually works 25 hours a week and that around 40 percent of people on zero-hours contracts want more hours, with most wanting them in their current job.

People on “zero-hours contracts” are more likely to be women or in full-time education. They are also more likely to be aged under 25 or 65 and over.

The figures have caused concern from unions. Paul Kenny, GMB General Secretary, said, “The numbers of workers each week that have no guaranteed hours of work has grown by 47,323 to 744,442 in a six months period. All across the economy the deal employers are offering workers is seriously decreased while workers often have little alternative but to accept what is on offer but workers are fighting back.”

However, the Chartered Institute of Personnel and Development (CIPD) have called for balance in the debate on zero hours contracts as latest figures show what they have described as a ‘modest increase.’

In response to yesterday’s ONS statistics, Gerwyn Davies, a labour market advisor at the CIPD, commented:

“The latest ONS statistics suggest that there has been a further modest increase in the number of people on zero-hours contracts and a growing proportion of people on zero-hours contracts for more than a year. However, it is important that the debate about zero-hours contracts is a balanced one, recognising that when managed well, these contracts can benefit both employers and workers.”

Comments from other business leaders yesterday also appeared to call for a balanced approach and an acceptance that zero-hours contracts can be useful for both employers and workers if administered fairly.

Andrew Hunter, co-founder of job search engine Adzuna, “The proportion of workers on fragile zero-hours contracts has swelled over the last year, despite calls to give these positions more security. But the increase highlights an appetite for flexible working that is not yet being met, as well as an ongoing need for some sectors, particularly retail and food, to respond quickly to changes in supply and demand.

“Women are more likely to look to zero-hours roles, because they can provide the flexibility to balance work around other commitments like childcare. The problem is that these contracts offer no long-term security, while the irregularity of hours can make it difficult to plan regular work. This gender imbalance shows the need for a much more flexible approach to full-time and part-time contracts, to help keep women in skilled positions while also adapting to their changing needs.

“The other group particularly prevalent in zero-hours positions is younger workers, who are more likely to accept these contracts as temporary summer or Christmas jobs, or while looking for other work. There is a place for this type of position, but younger workers shouldn’t have to lack job security simply as a result of their youth. A further increase in the prevalence of zero-hours positions would signal the start of an alarming trend away from long-term job security, and if possible should be avoided.”

The ONS stated that number of people saying they are employed on zero-hours contracts depends on whether or not they recognise this term and that it was not possible to say how much of the increase between 2014 and 2015 is due to greater recognition rather than new contracts. Greater recognition of the term in the UK is certain given that zero-hours contracts were a central topic during the lead-up to the General Election in May this year, with a ban on exclusivity clauses in effect since May 26.

Recent CIPD research found that zero-hours workers, when compared to the average UK employee, are just as satisfied with their job (60% vs 59%), happier with their work-life balance (65% vs 58%), and less likely to think they are treated unfairly by their organisation (27% vs 29%).

However, one in five zero-hours workers say they are sometimes (17%) or always (3%) penalised if they are not available for work, while almost half say they receive no notice at all or find out at the beginning of an expected shift that work has been cancelled. The banning of the use of exclusivity clauses should hopefully have reduced the instances where zero-hours worker are feeling exploited, but employers using these types of working arrangements should manage them carefully.

The CIPD therefore recommends that employers should:

• Conduct regular reviews on whether zero-hours contracts are appropriate for the nature of the work involved, and are offering the right balance of mutual flexibility for employer and employee
• Pay zero-hours workers travel expenses and at least one hour’s pay where work is cancelled at short notice
• Ensure zero-hours workers are paid at comparable rates to anyone else doing the same or similar work
• Train line managers to ensure that the reality of the employment relationship is consistent with the contract and that the employment rights of zero-hours workers are recognised

“It is also important to recognise when debating the pros and cons of our flexible labour market that according to OECD data in 2013, 79 percent of UK workers are on permanent contracts compared to 77 percent in Germany, 74 percent in France and 65 percent in Italy,” Davies continued. “Overall, the quality of employment in the UK compares more favourably with other countries than is often thought to be the case.”

The CIPD’s report ‘Employment Regulation and the Labour Market’ for 2015 also finds that:

• Compared with the European average, the UK has a larger proportion of ‘good’ jobs and a smaller proportion of ‘low quality’ jobs. Overall, 65% of jobs in the UK are rated as good jobs*, compared to just 54% in Italy, 50% in France and 49% in Germany
• As a whole, 84% of UK workers say they are satisfied with their working hours (EU 28 average 80%) and 77% report they are satisfied with their work-life balance (EU 28 average 74%). UK workers don’t seem much more fearful of losing their jobs than workers in countries with stricter employment protections (12-14% across UK, Germany, France and Italy)

The CIPD will be publishing further research on zero-hours contracts at the end of September 2015.

James Marsh

Website

James Marsh is an HR consultant and currently leads the editorial team at HRreview.

An avid HR blogger and tweeter on HR and management issues, James has worked as an HR manager, consultant, in-house recruiter and trainer and has expertise in both management strategy and HR policies and processes. He has a BA from the University of Nottingham in American Studies, a Masters in Human Resource Management from the University of Westminster and is a member of the Chartered Institute of Personnel and Development (CIPD).

James is also the regular chairperson of HRreview's series of webinars that discuss and debate the latest HR trends and issues, InsideHR.

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