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
    +10

    Comment number 141.

    Why can't employers just be honest and say that zero hours contracts are a good way to pay out less in wages and provide less favourable terms to their employees? Why must we always go through the ridiculous charade of employers justifying these type of practices? It's offensive for them to think that they are fooling us.

  • rate this
    -3

    Comment number 140.

    Most zero-hours contracts are in place for people with personal service companies to enable them to circumvent IR35. So scrap IR35, job done!

  • rate this
    +2

    Comment number 139.

    78.
    Seqenenre


    "Seems like all politicians should be on Zero Hour contracts"

    The ones in the House of Lords are but they get to choose their own hours , cant be told when to turn up, cant be sent home and get £600 for every day they they feel like signing in.

  • rate this
    +8

    Comment number 138.

    Companies who use Zero Hours Contracts include Amazon, Boots, Bupa, Cineworld, Centerparcs, and the Tory-run / part privatised NHS.

  • rate this
    +4

    Comment number 137.

    Of course flexible working is acceptable in the right circumstances but for companies to use this as a way of getting round workers right is disgusting. To put this all in to perspective Mike Ashley owner of Sports Direct is reportedly worth £1.5billion built of the backs of UK staff and Far East sweat shops. that cannot be justified at any level.

  • rate this
    -1

    Comment number 136.

    Time for a basic income for all citizens.!!

    Technology and automations advances are making roles redundant and this is the only solution.

    Stop wasting money in QE and give each citizen a basic income to live.

  • rate this
    -31

    Comment number 135.

    Have the unions woken up again?
    Go back to the 1970s!
    Just because you served a useful purpose in the process of emancipation of the working class at the turn of the century- & my family was active- doesn't mean you have a unique insight into what is best for working people today.
    Flexible working is a godsend- especially for workers with young children. Let's get out of the chicken coup mentality

  • rate this
    +29

    Comment number 134.

    109.Mr Jones

    "The problem is that this is the type of contract that our competitors overseas use. This is why we do so badly in manufacturing."

    Really? Tell that to Germany who manage to treat their workers as human beings and have the strongest manufacturing base in Europe

    The UK's problem is short-termist management who do not treat their staff as their organisations most valuable asset

  • rate this
    +2

    Comment number 133.

    It not exactly a fair balance of power between the employer and employee. Bascially casual labour, but restricting the employee to be available for the company.

  • rate this
    +13

    Comment number 132.

    92.AqualungCumbria
    This is going back to the days of standing at the factory gate hoping for a shift
    ---

    That is exactly what the business leaders and government (of all colours) in this country want.

    It is what happens in places like India and China.

    They want desperate workers who'll take anything at any pay rate "to make us competitive in the global market".

    The usual disgusting tripe!!

  • rate this
    +48

    Comment number 131.

    It's not just zero hour contracts that are a problem. Many people are having to settle for part-time work, but under 20 hour contracts you are unable to get dole or tax credits to help. My hubby works for a popular chain on a 20 hour contract. His weekly allocated hours are so inconsistent that he is regularly paid too little as supervisors never work out each 15 minute interval properly.

  • rate this
    +2

    Comment number 130.

    How are these contracts treated within the context of the "unemployment figures. Employed or Unemployed. ?

  • rate this
    +30

    Comment number 129.

    Zero hour contracts is simply not employment.

  • rate this
    +10

    Comment number 128.

    And how much worse would the workers' situation be, if there were not employees' rights imposed by the EU and the Tories were able to get rid of any constraints on 'flexibility' in the workplace. They were already trying to fight legislation that gives temporary workers certain rights that parallel employee rights. Oh those pesky serves with their 'treat us fairly and with dignity' nonsense.

  • rate this
    -9

    Comment number 127.

    So what's the alternative, have employers pay employees for sitting around doing nothing until the work comes in?

    Mark down my previous post if you all wish, it was completely predictable, but then please come back and suggest an alternative that doesn't force the employer out of business...

    ...thought not.

    Keep the red flag flying comrades ;)

  • rate this
    +8

    Comment number 126.

    Everyone takes a hit. Not just sob story victims that roll out the mundane, 'the tories hate us' tripe. Zero hour contracts are better than unemployment. the Tories understand this.

    -Explain to me how the average FTSE CEO pay up by £1 million in 3 Years TAX DOWN BY £200,000 Courtesy of their Chancellor Chum have taken a hit.

    The Tories certainly understand this and they are laughing at us!

  • rate this
    0

    Comment number 125.

    If some people find it flexible and they actually get hours that's great but honestly the employers are having a laugh most of the employees.There has to be a committment from the employers otherwise this practice will spread. It makes the Govt. stats look good when we know they're not. Show these contracts separately in the employments stats so we can really see what's going on.

  • Comment number 124.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    -122

    Comment number 123.

    At least it's above board and there is something of a contract, this used to be called "casual" work, cash in hand, etc.There may be some abuse but for the majority, as implied in the article, the employers have little choice either, it's a flexible workforce or no business!

  • rate this
    -35

    Comment number 122.

    We should consider that there are another one million people working...
    These conditions allow an employer to take on more employees without conditions being forced on us.

 

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