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
    0

    Comment number 1281.

    1221.LUFCAT....It just baffles me why so many seem to want to stop others doing things that don't harm anyone else.

    As casually suggested, I respect anyone's polite point of view. I doubt that anyone's opinion would deter those who are satisfied with their situation. Sadly, anything positive is open to abuse. Any system is workable through mutual respect, spoiled only by a manipulative minority.

  • rate this
    +1

    Comment number 1280.

    This could only happen with Tories in power. It is exploitation of the weak (workers) by the strong (and rich) employers. This and the practice of employing temporary workers through agencies who take a massive "cut" of what is paid should have been outlawed years ago. Too many people have fought for decent working conditions in the past for this to go uncorrected. Tories out! NOW!

  • rate this
    0

    Comment number 1279.

    This is just one of many injustices for the worker caused by Tory policies. People are that desperate that they will do anything to work, this plays into the hands of the Tory supporting businesses. I heard a wonderful discussion on five live this morning. One of the most important things for a business is to have employee loyalty well this will not encourage that. One word covers it all FEAR.

  • rate this
    +1

    Comment number 1278.

    Sports Direct managers do use zero hour contracts to punish staff, if a member of staff can't or won't do extra hrs at a moments notice they drop their hours. They also send home staff if they don't reach target figures at certain times of the day. Economicaly times are tough and people need these jobs, not easy for many to tell employers to stick their job where the sun don't shine.

  • rate this
    -1

    Comment number 1277.

    1275.michellegrand "One of the reasons Unions evolved was the way some employers would get the maximum they could from employees."

    ...as opposed to employees doing as little as possible for their employer. it cuts both ways.

  • rate this
    +5

    Comment number 1276.

    We will see Work Houses being introduced akin to the feared Victorian versions.

    The Tories of today are pathetic .

    And everyday they are being despised more and more by us the over worked Tax payer !

    FREE childcare for 300k Earners
    Unlimited farm subsides (benefits) for land owning farmers

    14pw taken from the poorest because they dare have an extra room

    Proud to be British ?? Yeah Right !

  • rate this
    +5

    Comment number 1275.

    One of the reasons Unions evolved was the way some employers would get the maximum they could from employees. Even now, many employers pay low wages and these are made up to a living wage by tax payers. Perhaps Mr Cameron will make it clear that this practice is unacceptable...

  • rate this
    +2

    Comment number 1274.

    My daughter worked at an attraction this summer but it rained a lot in the six week window and sometimes she would be on the bus when she got a call to say she wasn't needed. I pointed out that the new term for this was a ZHC. She didn't like this comment because she knew that when it rained their would be no visitors and the owners would only loose money if they had to pay her.

    I was the fool.

  • rate this
    +3

    Comment number 1273.

    @1268 goldrush76
    "If their employer is breaking the law they do not need to join a union to sort it out."
    Technically, you are correct, but in practice an individual would stand no chance, they would be sacked and blacklisted (yes it does happen). Union membership is harder to bully, and union fees cover the legal insurance needed for a successful grievance.

  • rate this
    +3

    Comment number 1272.

    Banning zero hours won't work, they would create a 1 hr week contracts to get around it. All shop assistants in sports direct are on temp zero hr contracts, it stinks and none of the staff get any money from shares for their work, only managers and supervisors on 20k pa get it, my partners boss gets 50k from those shares, all she does is follow company email instructions.

  • rate this
    -4

    Comment number 1271.

    1258.Dawko "They'll be wanting to bring back the Workhouse next."

    That's a far better solution than what we have now. It would certainly put an end to the benefit and entitlement culture that's been sweeping through this HYS today!

  • rate this
    +5

    Comment number 1270.

    1268 - As unions offer free expert legal advice to members, he would be in a better position "to sort it out".
    I think what people are forgetting (or unaware of) is that trade unions are active partners in forming employment law in the comparatively stronger German economy. Instead, the Thatcherites have cut-off Britain's nose to spite it's face.

  • rate this
    +3

    Comment number 1269.

    uncertain hours = uncertain pay = more likely not to spend

    We are a consumer led economy. So if businesses want to discourage people increasing their revenue, let them get on with. Same goes for the low pay culture

  • rate this
    -1

    Comment number 1268.

    1253.
    riff77 "You need to join a Union, and encourage your colleagues to do the same. Your employer is breaking the law."

    If their employer is breaking the law they do not need to join a union to sort it out.

  • rate this
    -3

    Comment number 1267.

    If you don't want the work .......don't do it. Seems simple to me.

  • rate this
    +1

    Comment number 1266.

    How does this differ from the 1930s when men queued outside works gates early in the morning and were picked out to get a day's work at the manager's discretion? Those who argued about poor working conditions, joined a trade union or whose faces just didn't fit, didn't work if the boss didn't choose them. They and their families had only means tested dole and charity to fall back on.

  • rate this
    +4

    Comment number 1265.

    a job with a zero hour contract is not a job

    everyone should refuse such 'jobs'

  • rate this
    +4

    Comment number 1264.

    Does anyone know if the John Lewis Partnership (a successful British company) offers Zero Hours Contracts?

    They will be celebrating 150 years in business next year.

    Their business model seems to be doing OK..... Could be a model for other companies to adopt!

  • rate this
    +2

    Comment number 1263.

    The problem is the minimum wage.

    Loads of people with no skills are looking for a job.

    The opportunity to exploit this surplus of labour would be to pay the going rate.

    Employers can't because of the min wage therefore they take the piddle by these zero hours contracts and people gladly sign up.

    Everybody with half a brain knew this would happen and said so at the time.

  • rate this
    +3

    Comment number 1262.

    @1251.Dave James
    "It's time for the Trades Unions to stand up for their members and act together on all employers that offer these contracts"

    Im sure they would if the great british public hadn't voted for Governments that made such action illegal, and left unions at risk of bankruptcy if they tried. Very few union members in the private sector now.

 

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