Cable warns of exploitation of zero-hours contracts

 

Business Secretary Vince Cable: "I think at one end of the market there is some exploitation taking place"

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The Business Secretary Vince Cable fears zero-hours contracts are being abused after research suggested a million people could be working under them.

Mr Cable said he was concerned there was "some exploitation" of staff on the contracts which give no guarantees of shifts or work patterns.

The Chartered Institute of Personnel and Development found up to 4% of the UK workforce were on such contracts.

It surveyed 1,000 firms.

"I think at one end of the market there is some exploitation taking place," said Mr Cable.

However, he pointed out that in many cases the level of flexibility offered by the contracts suited employees. "It can work for the worker as well as the employer," he told the BBC.

Formal consultation?

Mr Cable has been leading a review on the issue for the government since June and will decide in September whether to hold a formal consultation on specific proposals.

Unions have called for them to be banned.

Dave Prentis, general secretary of the Unison union, said: "The vast majority of workers are only on these contracts because they have no choice. They may give flexibility to a few, but the balance of power favours the employers and makes it hard for workers to complain."

Despite controversy over their use, just 16% of those affected said their employer often fails to provide them with sufficient hours each week.

Start Quote

You feel bullied. You start at 06:30am, could work till 11:30am, then be told there's no more work for you today”

End Quote Karen, social care worker

This was higher amongst those who described themselves as part-time, where 38% said they would like to work more hours.

Under zero-hours contracts employees agree to be available for work as and when it is required.

Positive role

Figures from the Office for National Statistics last week suggested 250,000 workers were on zero-hours contracts.

CIPD chief executive Peter Cheese said the reason his survey showed up to four more times the number of people on zero hour contracts compared to official figures could be down to a lack of precision in the measurement, as well as confusion over definitions.

"I think even sometimes employers themselves are not fully clear on the absolute nature of their contracts and whether it is genuinely zero hours," he said.

"There does need to be a closer look at what is meant by a zero-hours contract, the different forms that they take, and clearer guidance on what good and bad practice in their use looks like.

"Zero-hours contracts, used appropriately, can provide flexibility for employers and employees and can play a positive role in creating more flexible working opportunities.

"However, for some this may be a significant disadvantage where they need more certainty in their working hours and earnings... Zero-hours contracts cannot be used simply to avoid an employer's responsibilities to its employees."

The news emerged as it was reported that part-time staff at retailer Sports Direct and a number of London councils were among those employed on such terms.

Fluctuating wages

According to the CIPD's research, firms in the voluntary and public sectors were more likely to use zero-hours contracts than those in the private sector.

The industries where employers were most likely to report having at least one person on a zero-hours contract were hotels, catering and leisure, education and healthcare.

The CPID said one in five employers in the UK had at least one person on a zero-hours contract. This means workers can be officially counted as employed, but have no guaranteed paid work and can be sent home from their workplace without warning and without having earned anything.

While zero-hours contracts may suit some due to the flexibility they provide, critics point out that the system can lead to fluctuating wages and a risk that managers may use their contract as both reward and punishment.

Graphic showing full-time workers, part-time workers and zero-hour contracts

Rochelle Monte is a care worker on a zero-hours contract and she told Radio 4's Today Programme that she gave her employer details of her availability and then had to "hope for the best".

"It can change dramatically over the space of a week.

"So you might start off a week thinking you've got 40 hours, but by the end of the week you could be down to 12," she said.

Colin Angel from the UK Homecare Association said zero-hours contracts were a response to the way that local authorities commissioned home care services.

"Councils buy 70-odd percent of all hours of home care - and it's proved to be the way that you can retain a workforce who are available very flexibly whose hours can change over a month.

"[It] works well for care workers who largely appreciate the flexibility that their contracts have," he said.

At places of employment found to be using the contracts, the average number of workers who were on them was around 16%, according to CIPD.

Based on these figures, CIPD calculated that between 3% and 4% of all workers were on zero-hour contracts - equating to a million people in the UK labour force.

The employees who took part in the poll worked an average of just under 20 hours a week and were most likely to be aged between 18 and 24 or over 55.

 

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  • rate this
    -3

    Comment number 101.

    Zero hours doesn't technically mean no holidays - our zero hour contract staff get 12% added onto their hourly rate purely for this purpose.

    Without some zero hour contracts, many will find there will be no work at all or they will be employed as contractors (responsible for their own tax, NI, training etc). When faced with that prospect, zero hours looks preferable.

  • rate this
    +10

    Comment number 100.

    I truly despair of this country - what next, children working down the mines, oh right, forgot, we haven't go any left thanks to the Tories.

  • rate this
    -63

    Comment number 99.

    I see the BBC is doing it's level best to talk down the economy again. They must be squirming up in Salford now austerity is working and people have rejected waste, fecklessness and something for nothing benefit living. The licence tax needs to end.

  • rate this
    +4

    Comment number 98.

    How many employees have added value on there skills base that Employer use's to his advantage, then often, I would say always fail to
    reward. As a employee you are their to be screwed by your employer, your value is in the moment, after the moment you are a liability. Zero hrs are just another weapon in the Employers armoury to renege on any commitments to his employees and should be outlawed.

  • rate this
    +3

    Comment number 97.

    Zero hours contracts surely can't survive with the changes to workplace pensions with automatic enrolment already under way with the larger employers. All employers will have to enrol staff into a pension scheme (by law) - but if they can't provide a regular salary figure how on earth will they keep on top of regular pensions contributions - it will be a nightmare to calculate each month.

  • rate this
    -3

    Comment number 96.

    Unpalatable though zero hours contracts are, I guess the elephant in the room is that, unlike years ago, our far eastern competitors have long since matched our industrial capabilities with workers on zero hour arrangements free from our own self imposed health, safety, environmental & social ("rights") extra production costs.

  • rate this
    +7

    Comment number 95.

    Paul Goddard - Complete agree. How many of the so-called 1 million jobs created as touted by the coalition are zero contract - slowly nay quickly everything the Tories do is being shown up - arrogant people never change their spots but I cannot believe how naive the voting public are by being drawn in by a party more closer to facsim that than any other party.

  • rate this
    +3

    Comment number 94.

    I have just started my own Contract Cleaning business, leaving the security of full time employment on 23rd August this year. My contracts are around the country and vary in time scale from 4 to 12 weeks, so it is impossible for me in the interim to take on staff full or part time long term, so I will have no choice but to use the zero hours contracts. . . . .

  • rate this
    +3

    Comment number 93.

    The Tories won't want to upset their corporate pals, so no doubt Zero Hours contracts are here to stay.

    I wonder if Labour are intending to ban them. Here's hoping.....

  • rate this
    +11

    Comment number 92.

    I can guarantee who ever thought up this scam is not on a zero hour contract at all.

    All people who are on them should be counted as unemployed,then we can all see the worst case scenario in the Government manipulated figures.
    This is going back to the days of standing at the factory gate hoping for a shift
    The firms that use them should be named and shamed so we can all give them zero business.

  • rate this
    +8

    Comment number 91.

    How is anyone supposed to plan anything, have kids, get a mortgage under these kinds of contracts?
    If companies have the work available then they can at least guarantee a minimum pw instead of leaving people to payday loans and the benefits system.

  • rate this
    +27

    Comment number 90.

    Zero- hours contracts are yet another way to exploit the poor.

  • rate this
    +6

    Comment number 89.

    In my view, this isn't the full story. Many people have work contracts that have very few hours (e.g. four hours a week) that are not zero hour contracts. This creates just as much uncertainty over a person's finances as a zero hour contract does. Therefore, all low hour contracts should be looked into. A family cannot be supported on such a low hour, uncertain contract. It's highly unethical!

  • rate this
    +3

    Comment number 88.

    I am currently working for a company that provided me a zero-hour contract. I had no choice-it is not that busy with jobs in London now.
    Well...they can cancel my shift the last minute and sometimes i do less then 20 hours, like 12 hours a week...CRAZYYYY!!! and you can loose a confidence in yourself...for sure!

  • rate this
    +16

    Comment number 87.

    So the UK unemployment figure is 3,500,000+ then.

    Career politicians - in power to screw you over.

    Don't ever vote for them.

  • rate this
    +4

    Comment number 86.

    We are often told that business likes stability . Well so do most people but in this land of the no questions asked bankruptcy and zero hour contract we are heading for a barrow boy cut and run low skill , low pay economy where the masses will be left with nothing at the end of their working lives and dependent on benefits , that is if there is any money to pay benefits.

  • rate this
    +6

    Comment number 85.

    Seem to remember somebody once saying "We're all in this together". Erm... who was it now... er..

  • rate this
    +5

    Comment number 84.

    This is the way for a lot of big name companies..
    works for some workers but if you've got a family & a mortgage then you want permanent hours.

  • rate this
    +2

    Comment number 83.

    Globalisation has seen the handwork, Clothing, Bedding, Footwear, White goods, ...etc move to the Far East.

    IT and Computing has moved to India. I'm told Legal depts.are also now moving to India.

    It's all part of the post-industrial age in the UK and therefore does not surprise me!

  • rate this
    -3

    Comment number 82.

    It is not true to say zero hours contracts mean no holiday pay or sick pay.
    Any hours worked under any contract always go towards holiday entitlement and as for sick pay, as long as you earn £109 a week you are entitled to statutory sick pay, paid by employers but then claimed from governement.

 

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