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27 November 2013

Zero-hours contracts ‘unfairly demonised’

Ahead of the proposed Government consultation on the regulation of zero-hours contracts, new research published by the CIPD suggests that the use of zero-hours contracts in the UK has been ‘underestimated, oversimplified and unfairly demonised’.

In September 2013, Business Secretary Vince Cable announced that the Government would soon be issuing a new consultation paper on its proposals for regulating zero-hours contracts and tackling the perceived abuses of such contracts, in particular the issue of ‘exclusivity’ (when the individual is prevented from working for anyone else).

Meanwhile, the CIPD has just published the results of its survey of over 2,500 workers, which suggests that zero-hours workers are just as satisfied with their job as the average UK employee, and are more likely to be happy with their work-life balance than other workers.

According to the CIPD, provided zero-hours contracts are used for the right reasons and properly managed, they provide flexibility that works for both organisations and individuals.  Rather than introducing new regulations to restrict the use of such contracts, the CIPD wants the Government to focus on improving employer understanding of how to use these contracts.

Key findings of the CIPD survey include:

  • Approximately one million people (3.1% of the UK workforce) are employed on zero-hours contracts;
  • 60% of zero-hours workers are satisfied with their job, compared to an average of 59% of UK employees.  They are happier with their work-life balance (65% compared to 58%);
  • 47% of zero-hours workers are satisfied with having no minimum set contracted hours, whilst 27% are dissatisfied;
  • 80% of zero-hours staff reported that they are not penalised if they are not available for work;
  • Almost half of zero-hours workers either receive no notice at all (40%) or find out at the beginning of their shift (6%) that work has been cancelled;

The CIPD also makes a number of recommendations to improve employers’ practice in the use of zero-hours contracts:

  • Regular review by employers of whether zero-hours contracts are appropriate for the nature of the work, and offer the right balance of mutual flexibility for employer and employee;
  • Not restricting zero-hours staff from working for another employer if there is no work available;
  • Compensation for cancellation of a shift at short notice of at least one hour’s pay, as well as travel expenses;
  • Comparable pay rates to anyone else doing the same or similar work;
  • Training for managers to ensure consistency of the employment relationship with the contract.

Comment

Whilst this research supports the assertion that many workers welcome the flexibility offered by zero-hours contracts, there are still significant numbers for whom the uncertain hours and lack of security pose both financial and practical difficulties, not least those who need to make childcare arrangements.

The CIPD is against regulatory restrictions on the use of zero-hours contracts, and it will be interesting to see how the Government proposes to tackle the perceived abuses of such contracts.  It is highly unlikely that the use of zero-hours contracts will be banned outright, but regulating specific aspects of the contracts presents complex legal challenges and will be difficult to achieve in practice.

A copy of the report together with guidance on the use of zero-hours contracts is available on the CIPD website.