Report calls for in-depth review of zero hour contracts

The Work Foundation has called for a more systematic investigation into zero hours contracts than the review commissioned by Business Secretary, Vince Cable, saying their use is more widespread than temporary low-paid work, including managers.

The report Flexibility or insecurity? Exploring the rise in zero hours contracts also found only 25% of those on zero contract hours would like more hours.

It describes how existing official statistics are unreliable and concludes that a more in-depth review is required to identify their full extent and how and why they are being used.

The author of the report, Ian Brinkley, director of The Work Foundation, says calls to ban zero hours contracts for reasons of bad employment are misplaced, as is the view that they are a uniquely exploitative form of contract. The report shows that those on zero hours contracts are more likely to be part of the permanent workforce than in temporary employment relationships. He also suggests that UK and OECD economies have previously chosen to regulate and legislate where necessary and encourage good practice rather than restrict or place an outright ban.

The report shows that the picture of how the contracts are used varies from sector to sector. For instance, in low-paid work, their use is common in hospitality – where it is reported in nearly 20% of workplaces – but rare in retailing – where it is 6%. The report also reveals:

– under 18% of those on ZHCs said they were looking for alternative employment, compared with 7% of all employees.

– 60% of care-workers were on ZHCs in 2011-2012 compared with about 50% in 2008-2009.

– ‘nurse banks’ work well and most respondents were satisfied with their working pattern (86% reported that bank/agency work suits them well).

– a significant share of those on ZHCs (43%) are  in the top three occupational groups (managers, professionals and associate/technical staff). A fifth (17%) were manual skilled or semi-skilled jobs and just under another fifth (17%) were care, leisure or sales jobs. Just over one in ten were unskilled and just over one in ten were administrative.

– incidence is highest in hospitality, where ZHCs are reported in nearly 20% of workplaces; however, they are less common in the retail industry, in business services and public administration at between 4% and 6% of all workplaces.

– 44% had remained for two years or more with the same employer and 25% for five years or more; 75% had been in a job for more than two years.

– while just over 25% of people on ZHCs said they would like to work more hours, three quarters of ZHC workers did not want more hours.

– 75% of those on ZHCs say their hours vary each week, compared to 40% of employees not on ZHCs – so while those on ZHCs clearly experience a much greater degree of hours variability, many on conventional contracts also face variable weekly hours.

Brinkley said: “In spite of the ONS figure increasing to 250,000 following their adjustment and the CiPD survey estimating around a million people are on such contracts, much confusion still remains. There are vast numbers of workers who are unaware they are on zero hours contracts. We still don’t know how many have taken them by choice and how many out of necessity. Nor do we yet understand the true reasons why employers are making more use of them.

“The investigation announced by Vince Cable is inadequate. We favour a far more systematic approach – perhaps along the lines of the Hutton Fair Pay Review which The Work Foundation would again be happy to support. A fuller investigation would enable accurate analysis and such data would help devise effective policy measures and map out best employer practice to protect workers most vulnerable to potential abuse.”

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