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August 09, 2013

UK has one million 'zero hours' workers

Research published by professional HR body the Chartered Institute of Personnel and Development (CIPD) suggests that about one million UK workers have 'zero hours' employment contracts – significantly more than previously stated.

Zero hours contracts (sometimes called 'casual contracts') allow employers to take on staff without having to specify hours of work, which means employees only work when required, often after receiving very short notice. Some zero hours contracts require workers to take shifts they are offered, others don't. Employees are only paid for the hours they work, and usually they are not entitled to sick pay (although they have rights to holiday pay).

Figures published by the Office for National Statistics put the number of people in the UK "who believe they are on zero hours contracts" at just 250,000 (about 1% of the national workforce). But the CIPD research, taken from its 2013 Labour Market Outlook, which is "based on a nationally representative survey of [more than] 1,000 employers", suggests the real figure is more than one million (3-4%).

Key findings from the CIPD research include:

  • 19% of UK employers employed at least one person on a zero hours contract;
  • employers in the voluntary sector (34%) and the public sector (24%) are more likely to use zero hours contracts than private sector employers (17%);
  • sectors in which employers are most likely to employ at least one person on a zero hours contracts are hotels, catering and leisure (48%), education (35%) and healthcare (27%);
  • a quarter of organisations with 250 or more employees use zero hours contracts, compared to 11% of those with fewer employees;
  • among the fifth of employers that use zero hours contracts, 54% employed less than 10% of their workers on these terms.

Many high-profile retailers now favour such contracts. As reported by The Guardian and others, an estimated 20,000 of Sports Direct's 23,000 workers are on zero hours contracts, as well as about 80% of pub chain JD Wetherspoon staff.

Such contracts are becoming increasingly common for younger workers. As reported by the BBC in May, the number of 16 to 24-year-olds on zero hours contracts rose from 35,000 in 2008 to 76,000 in 2012.

Commenting on concerns voiced about the rise of zero hours contracts, business secretary Vince Cable admitted: "I think at one end of the market there is some exploitation". However, he said the flexibility such contracts provide can "work for the worker, as well as the employer".

Dave Prentis, general secretary of trade union Unison, 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."

CIPD CEO Peter Cheese said: "The assumption that all zero hours contracts are bad and the suggestion from some quarters that they should be banned should be questioned. There needs to be a closer look at what is meant by a 'zero hours contract' and clearer guidance on what good and bad practice looks like. And this needs to consider both the advantages and disadvantages for businesses and employees.

"Zero hours contracts, used appropriately, can provide flexibility for employers and employees, and can play a positive role in creating more flexible working opportunities. This can, for example, allow parents of young children, carers, students and others to fit work around their home lives.

"However, for some this may be a significant disadvantage, where they need more certainty in their working hours and earnings and we need to ensure that proper support for employees and their rights are not compromised. Zero hours contracts cannot be used simply to avoid an employer's responsibilities to its employees."

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