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
    +1

    Comment number 361.

    The immigrant worker is not worried, they are quite happy with a "bed in a shed".

  • rate this
    +7

    Comment number 360.

    We should start a database listing all the companies who exploit workers on zero hour contracts and have poor man management. That way as consumers we could boycott all the firms who do this. Like the saying goes if you don't look after your staff, they won't look after the business. You pay peanuts, you get monkeys.

  • rate this
    +14

    Comment number 359.

    A zero hour contract underlines a lack of planning by a business. If a business cannot even plan how many hours a week it needs employees then how can it be expected to plan a world class business strategy. The nonsense about it making for flexibility in the market is just that: nonsense.

    Forget about profit, Zero Hour Contracts are a way to cover for the incompetence of failed managers.

  • rate this
    +15

    Comment number 358.

    This is yet another nail in the coffin for Britain. The minimum wage although helping a few has resulted in an employee earning the same wage for a factory job as you could earn 15 years ago. Zero hours contracts have made things even worse. A nation of renters struggling to survive while the fat cats and multi nationals count their ever increasing profits. Well done politicians!!!!

  • rate this
    +1

    Comment number 357.

    The existence of these type of contracts is plain evidence that the Labour Party and unions have totally capitulated (or are in cahoots) to business.

    I don't understand why people vote for Labour. These two groups have totally lost sight of who exactly they are supposed to be representing. It would be better to cut these people loose and start over.

    Its clear we have a sham democracy.

  • rate this
    +69

    Comment number 356.

    Our company loves them. If we contact the worker before 1200 then they don't come in that night, and they don't get paid.
    Pretty awful for budgeting, claiming benefits to fill the gap (how IDS's scheme will work will be interesting to see), but not a problem that MP's or senior civil servants and their families are ever likely to understand.

  • rate this
    +8

    Comment number 355.

    Please welcome the Government to the real world.

    Zero hour contracts, having your job reduced to part time (take it or leave), re-apply for your own job every year, "poor" performance warning despite working your b@#>+%&s off so you don't get a pay rise.

    Big employers know every (barely legal) trick in the book they can use to minimize what they pay you but you're so desperate you'll take it.

  • rate this
    +1

    Comment number 354.

    As in so many things there are a few that spoil it for the many.

    Used sensibly zero hour contracts can make a lot of sense to both employer and employee.

    It would seem we need to legislate that the number of hours must be agreed before a worker agrees to work each shift. Maybe even an agreement for not zero hours but an agreed number per pay period - like 16 a week.

  • rate this
    +5

    Comment number 353.

    no wonder the owners of likes of WONGA donate vast sums to the |tory party such employment practices play right in to their immoral legal loan sharking activities charging vast sums in interest when the borrower cant even get a few hours work to pay their bills this country is on a slippery slope loan shark political inflewence OK union inflewence evil immoral and disusting 2015 scary scary scary

  • rate this
    +5

    Comment number 352.

    The zero hours contracts would be ok if the hourly rates paid were in line with a Living Wage too often these contracts are an excuse to reduce labour costs.

    Amazon will send people home mid shift with no notice if there is not enough work to keep them flat out

    too often seen as good management but is often exploitive Amazon manage to release these temps February and taken on in September

  • rate this
    +7

    Comment number 351.

    Gave birth to the industrial revolution, best scientists and doctors in world, and now our kids face zero hours picking strawberry for Berlin. Go to hell.

  • rate this
    +4

    Comment number 350.

    It is little more than a further example of the growing 'slum' society that 'Ding Dong' and the 'Californian Cowboy' did so much to promote along with their ideological bedfellows Hayek and Friedman.
    Blair and Brown were a disgrace for allowing it to develop on their watch.
    Workers will have to get off their knees to fight the injustice if we are not all to be dragged into the gutters.

  • rate this
    -12

    Comment number 349.

    My daughter (student living at home) works a ZHC as a lifeguard at a local pool - loves it and gives her some financial independence. My best friends wife works a ZHC at a local restaurant - supplements her hubbies income and they love it.

    This isn't the universal exploitation the moanies on here want you to believe. Many taking on this work do not actually want full time committed work.

  • rate this
    +4

    Comment number 348.

    At 304, therealist said:
    Ha ha, I live in the REAL world. Banning these contract will not create jobs and will make many businesses unviable. If you think any different, you're the one not being realistic.

    My response:
    Your 'real world' is nothing more than corporate greed. A properly structured business plans ahead - and employs accordingly. Have you never heard of employee loyalty?

  • rate this
    +5

    Comment number 347.

    If you run a pub chain that serves food and is open for set hours during the week, you can get flexibility by contracts of (say) 30hrs work/staff/week but by shifts set by the Manager.
    No need at all for Zero hours - just a planned shift system.
    Zero hours in this situation sounds more loke exploitation than flexibility!

  • rate this
    +4

    Comment number 346.

    There are many people who are "employed" by agencies.
    Am I correct in assuming that they are not included in this figure?
    If they are not contracted for fixed hours, then they are also in the same situation.

  • rate this
    -5

    Comment number 345.

    308. Why do you look at the concept of 'contempt' as just a one-sided thing? Workers who don't have as much money as the employers they work for can regard their employers with contempt too - it's also called jealousy.

  • rate this
    -3

    Comment number 344.

    I for one will be voting UKIP in 2015

  • rate this
    +8

    Comment number 343.

    Zero hour contracts / casual employment may be necessary for some small companies but they are often used by large PLCs, who are not fighting for survival but purely to reduce labour costs.

    These large well known customer facing companies and they should be named and shamed by their penny pinching.

  • rate this
    +12

    Comment number 342.

    @304 "therealist" If not having zero hours contracts would make some businesses "unviable", then I suggest these are the sort of businesses that are not needed.

    Mr Cameron has been lying through his teeth about Tory job creation after decimating public sector jobs. Now those lies are coming home to roost.

 

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