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"

Related Stories

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.

 

More on This Story

Related Stories

The BBC is not responsible for the content of external Internet sites

Comments

This entry is now closed for comments

Jump to comments pagination
 
  • 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.

 

Page 60 of 65

 

More Business stories

RSS

Business Live

  1.  
    12:18: Live long and prosper
    Spocked dollar bill

    The Toronto Sun doesn't feature often on Business Live. In fact it may be a first. But what a first. "Star Trek fans told to stop 'Spocking' Canadian $5 bill" by the Bank of Canada". Take a look. Or the BBC's version of the story is here.

     
  2.  
    12:07: Toyota moves
    Toyota

    Toyota is promoting two foreigners to senior roles. Didier Leroy, its European boss, will become one of six executive vice-presidents - the first non-Japanese employee to hold such a role. North America group vice-president Julie Hamp will become Toyota's managing officer - the first woman to hold an executive position.

     
  3.  
    11:49: Household incomes Douglas Fraser Business and economy editor, Scotland
    IFS graph on living standards

    retweets: "The rapid fall and slow rise of living standards: new IFS projections and analysis."

     
  4.  
    11:32: Areva cost savings
    Areva building

    The French state-controlled nuclear group Areva has a new strategy. It will focus on its nuclear business, which will boost its partnership with utility EDF. It's made losses in the past four years. Now it plans to have made cost savings of 1bn euros (£727m, $1.12bn) by 2017.

     
  5.  
    11:21: Greggs results
    Greggs share price graph

    Greggs shares have gained well after its results - up 3.4%. Earlier it said it made gains from property disposal of £1.5m (2013: £1.3m). Its pre-tax profit was up 41.1% to £58.3m (2013: £41.3m).

     
  6.  
    Via Twitter Robert Peston Economics editor

    tweets: "A win is a win, but @George_Osborne will note ECJ ruled on ECB's lack of authority not on merit of discrimination against non-euro members"

     
  7.  
    10:55: Scottish Power
    Pylons

    Scottish Power has been banned from "proactive sales" for 12 days by Ofgem for failing to meet customer service targets. The energy supplier said it was committed to treating customers fairly.

     
  8.  
    10:43: Indian economy World Service
    Arya

    A trip not to Bollywood but Tollywood for Business Matters presenter Fergus Nicoll in the latest instalment of the programme's trip to Chennai in southern India. Fergus asks how far economic development is provoking social change and interviews Tamil language film star Arya (pictured left). Listen here.

     
  9.  
    10:29: Tesco board
    Tesco

    More boardroom moves at Tesco. Gareth Bullock is stepping down from the main board tomorrow after almost five years, but will remain a director of Tesco Bank. He follows Jacqueline Tammenoms and Liv Garfield, who said last week they would leave. Byron Grote - a director of Unilever, Anglo American, Standard Chartered and Akzo Nobel - will join from 1 May.

     
  10.  
    Via Twitter

    Simon Nixon, chief European commentator for the Wall Street Journal, tweets:

    Huge upward surprise in eurozone retail sales, up 1.1% on month compared to consensus forecast of 0.2%. More evidence recovery strengthening. @Simon_Nixon

    Shopping
     
  11.  
    10:13: Household incomes BBC Radio 4

    Shadow chief secretary to the Treasury, Chris Leslie, accepts that incomes have improved for some, but not most people: "The Chancellor has got a plan which is very much focussed on that trickle-down philosophy lavishing tax cuts on those at the top - and the people at the top are doing very well. It's the question about 90% of the rest of the country - what is happening to them? And for them life is getting much harder."

     
  12.  
    09:57: Market update

    Here are the market numbers. London's FTSE 100 is down 0.12% at 6,880.78. Frankfurt's Dax is down 0.41% at 11,234.49 and Paris's Cac 40 is up 0.05% at 4,871.87. The pound is down 0.13% against the dollar at $1.5344 and is up 0.28% at 1.3783. Ho hum.

     
  13.  
    09:48: Eurozone economy

    More good news. The January services PMI for the 19-country eurozone, which is up one point to 53.7 - but a touch under the flash reading of 53.9. "The outlook has brightened for all countries," says Chris Williamson, chief economist at Markit.

     
  14.  
    Via Twitter James Landale Deputy political editor

    Big question: is UK win at ECJ against eurozone land grab a one off or proof that UK can win EU reform battles? @BBCJLandale

     
  15.  
    09:26: Euro ruling
    Euro notes

    Good news for the City after the General Court of the European Union ruled that the European Central Bank was wrong to insist that euro clearing houses be based in the eurozone. Britain had challenged the policy, saying it went against the bloc's single market.

     
  16.  
    09:16: Economy CBI Radio 5 live

    John Cridland the CBI chief got in a couple of requests for George Osborne via Wake Up to Money: "Lower taxes on business because if you give business money they can create more jobs. But we need to invest in childcare support for low paid families. The cost of childcare is holding them back from taking jobs."

     
  17.  
    09:02: Household incomes BBC Radio 4

    Chancellor George Osborne, has been talking to the BBC: "The picture you hear, particularly from my political opponents, of the British economy, is not one reflected in this independent report. Indeed quite the opposite - what they show is that Britain is growing, that incomes are rising, that the richest have made the biggest contribution, that inequality has fallen."

     
  18.  
    08:48: Standard Chartered
    Standard Chartered

    No great surprise, perhaps, that outgoing Standard Chartered chief executive Peter Sands - and three other directors - have decided not to take a bonus for last year considering that the bank's pre-tax profits fell by a quarter to $5.1bn (£3.3bn). With a touch of understatement, chairman Sir John Peace says: "2014 was a challenging year and our performance was disappointing."

     
  19.  
    08:35: Household incomes

    More on that research suggesting living standards in the UK have now returned to levels last seen before the financial crash. The IFS says incomes are now rising at more than 1% a year. Its director, Paul Johnson, says there is not much to trumpet about: "It's astonishing actually that seven years later incomes are still no higher than they were pre-recession and indeed for working-age households they're still a bit below where they were pre-recession."

     
  20.  
    08:23: BlackBerry BBC World News

    Technology correspondent Rory Cellan-Jones has been speaking to John Chen, the boss of BlackBerry, on World Business Report. Rory asks him if he can imagine company no longer making handsets: "It's a little bit of speculation at the moment. I would say this: for our shareholders, nothing is sacred." Perhaps sales volumes speak louder than words.

     
  21.  
    Via Twitter Adam Parsons Business Correspondent

    So what does @jimmy_wales consider "an abomination"? And what does @CBItweets want from the Chancellor? Click here to listen to today's Wake Up to Money. @AdamParsons1

     
  22.  
    08:07: Eurostar sale BBC Radio 4
    Eurostar

    Sim Harris, managing editor of Rail News, tells Today that Britain's 40% stake in Eurostar went for a higher than expected £757m because there was a lack of high quality assets available to investors. He adds: "Whether it's the right thing to do is a question for George Osborne."

     
  23.  
    07:55: Legal and General results

    The insurer Legal & General said operating profits rose 10% last year to a lower than expected £1.28bn. Company pension deals helped sales of annuities to jump 28% to £44bn.

     
  24.  
    07:44: Greggs results

    Greggs has been freshening up its stores over the past year. It refitted 213 shops, opened 50 new outlets and closed 71 to bring the total to 1,650 shops as of 3 January.

     
  25.  
    Via Twitter Kamal Ahmed BBC Business editor

    Forget the IFS, the Pasty Index is in - Greggs sales up 4.5%, always a good barometer of consumer confidence. @bbckamal

     
  26.  
    Via Twitter Robert Peston Economics editor

    tweets: "Living standards back to where they were in 2007-8, but mainly for those over 60. & are rising strongly now, says IFS "

     
  27.  
    07:17: ITV results
    ITV

    ITV plans to return £250m to shareholders with a special dividend of 6.25p a share after a bumper 2014, with adjusted pre-tax profits up 23% to £712m and 39% higher at £605m on the pure pre-tax measure. Revenue rose 7% to a shade under £3bn. "ITV is now a high-growth business," says chief executive Adam Crozier.

     
  28.  
    07:06: Eurostar sale BBC Radio 4
    Eurostar

    Gemma Godfrey, head of investment strategy at Brooks Macdonald Asset Management, tells Today that the £757m the Government got for the Eurostar stake was higher than expected, but questions what the proceeds be used to fund. She believes the cash should be used to fund the next generation of infrastructure that will in turn create profits for the public purse.

     
  29.  
    07:00: Greggs results
    Greggs shop

    Greggs results hit the desk. Total sales rose 5.5% to £804m, while like-for-like sales up 4.5% - much better than the 0.8% fall in 2013.

     
  30.  
    06:49: ITV results BBC Radio 4
    Downton cast

    ITV reports annual results very soon. Toby Syfret of Enders Analysis has told Today that while channel brands have become less important than they were in the past, the decline is gradual. Programming - such as Downton Abbey - remains the crucial factor. "Good content is going to be the core of whoever is successful in the future," he says.

     
  31.  
    Via Twitter Sally Bundock Presenter, World Business Report

    tweets: "Morning. #Ukraine hikes interest rates to 30%. Plus GDP slows in #Australia and an i/v with the boss of #Blackberry. See you soon." That's on World Business Report.

     
  32.  
    06:26: Household incomes

    Big discussion about the Institute for Fiscal Studies (IFS) report on household incomes. Whether the average household income is back to levels they were at before the financial downturn struck. One measure, for the over 60s, it is. But for most of the rest of us, it hasn't got there yet. Our story here.

     
  33.  
    06:15: India rates

    India has cut its main lending rate by a quarter of a point to 7.5% in a bid to boost economic growth. It is the second time this year that the Reserve Bank of India has cut rates as inflation is running at 5.1% - well under the 8% target - on the back of cheaper oil.

     
  34.  
    06:12: Sandwiches Radio 5 live
    UK map of bread names

    Greggs figures are out in an hour or so. The market is looking for 4% growth, earnings are expected to be up 9%. The UK is estimated to spend £9bn a year on sandwiches. Wake Up to Money has been discussing what these are variously called around the country. There's a map illustrating this.

     
  35.  
    06:07: Eurostar sale

    The stake is being bought by a Canadian pension fund and a UK asset manager will buy shares for £585m and Eurostar will also hand over £170m to redeem shares which guarantee a dividend. The stake was officially valued last year at £325m.

     
  36.  
    06:02: Eurostar sale Radio 5 live

    The sale by the Government of its shares in Eurostar for £750m is under discussion on Wake Up to Money. Gemma Godfrey head of investment strategy at wealth manager Brooks MacDonald tells the programme: "After the debacle we saw when they were selling Royal Mail they had to get it right and the value has come in above expectations."

     
  37.  
    06:00: Rebecca Marston Business reporter, BBC News

    Good morning. Strap in and sit back. Today's Business Live page will have all the news, all day. Greggs and ITV results are expected to be early highlights.

     

Features

  • Elderly manSuicide decline

    The number of old people killing themselves has fallen. Why?


  • Petrol pumpPumping up

    Why are petrol prices rising again?


  • Image of George from Tube CrushTube crush

    How London's male commuters set Chinese hearts racing


  • TricycleTreasure trove

    The lost property shop stuffed with diamonds, bikes... and a leg


Try our new site and tell us what you think. Learn more
Take me there

Copyright © 2015 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.