Close to 600,000 workers or 2 per cent of the workforce are employed on a zero-hours contract. Photograph: Getty Images.
Show Hide image

We should reform zero-hours contracts, not ban them

Abuse needs to be addressed, but we must maintain flexibility for employers and workers.

There is still much that we don’t fully know about zero-hours contracts – contracts that do not guarantee any hours of work. Estimates about the number of people working on zero-hours contracts vary significantly and the jury is out as to whether their use is cyclical (driven by years of economic downturn), structural (a permanent feature of the labour market) or both. But there is already enough evidence of misuse to create a strong case for action on certain fronts to improve security for workers, while rejecting an outright ban. Our new report, Zeroing In, puts forward a set of recommendations for the reform of zero-hours contracts, including, but going beyond, a ban on exclusivity clauses already suggested by the government.

The latest estimate from the Office for National Statistics is that close to 600,000 workers or 2 per cent of the workforce are employed on a zero-hours contract. Health and social care, hospitality and administration account for over 50 per cent of these workers. Zero-hours contracts are intended to offer flexibility to employers and workers. Employers can quickly change their staffing levels at no cost and workers can work when they choose, helping to balance family and other commitments. However, in reality, a quarter of those on zero-hours contracts work a fixed pattern of hours each week; a third of employers expect workers to be available for work at all times; and four out of ten zero-hours workers would like to work  more. Flexibility for employers too often comes at the expense of workers.

To address this imbalance, anyone who has been employed on a zero-hours contract for at least a year and works a relatively consistent pattern of hours should have the right to a fixed-hours contract, if they choose. Under these circumstances, zero-hours contracts are not being used to respond to changes in demand. Workers are simply being denied employment rights to which they are entitled, such as Statutory Sick Pay and paternity and maternity leave. Introducing this right after 12 months rather than 12 weeks, as has been suggested, recognises that employers need time to plan how best to use their staff.

We should also extend the right to a set of employment terms to all workers not just employees. This would help to address the fact that anecdotally many people who take up a zero-hours contract do not know they have no guaranteed hours  until their hours are cut and are frequently not aware of their entitlements. In addition, Acas should work with business representatives and unions to set out a good practice guide to increase employer awareness of how to use zero-hours contracts fairly and more funding should be available for enforcement to proactively clamp down on employers who misuse these zero-hours contracts.

This is a deliberately cautious approach, seeking to address abuse, while maintaining flexibility for employers. As the recovery strengthens and the data on zero-hours contracts becomes clearer, we will need to keep the situation under review. If improvements are not forthcoming, a stronger, more statutory approach could be justified.

Vidhya Alakeson is deputy chief executive of the Resolution Foundation

Getty Images.
Show Hide image

PMQs review: Theresa May shows how her confidence has grown

After her Brexit speech, the PM declared of Jeremy Corbyn: "I've got a plan - he doesn't have a clue". 

The woman derided as “Theresa Maybe” believes she has neutralised that charge. Following her Brexit speech, Theresa May cut a far more confident figure at today's PMQs. Jeremy Corbyn inevitably devoted all six of his questions to Europe but failed to land a definitive blow.

He began by denouncing May for “sidelining parliament” at the very moment the UK was supposedly reclaiming sovereignty (though he yesterday praised her for guaranteeing MPs would get a vote). “It’s not so much the Iron Lady as the irony lady,” he quipped. But May, who has sometimes faltered against Corbyn, had a ready retort. The Labour leader, she noted, had denounced the government for planning to leave the single market while simultaneously seeking “access” to it. Yet “access”, she went on, was precisely what Corbyn had demanded (seemingly having confused it with full membership). "I've got a plan - he doesn't have a clue,” she declared.

When Corbyn recalled May’s economic warnings during the referendum (“Does she now disagree with herself?”), the PM was able to reply: “I said if we voted to leave the EU the sky would not fall in and look at what has happened to our economic situation since we voted to leave the EU”.

Corbyn’s subsequent question on whether May would pay for single market access was less wounding than it might have been because she has consistently refused to rule out budget contributions (though yesterday emphasised that the days of “vast” payments were over).

When the Labour leader ended by rightly hailing the contribution immigrants made to public services (“The real pressure on public services comes from a government that slashed billions”), May took full opportunity of the chance to have the last word, launching a full-frontal attack on his leadership and a defence of hers. “There is indeed a difference - when I look at the issue of Brexit or any other issues like the NHS or social care, I consider the issue, I set out my plan and I stick to it. It's called leadership, he should try it some time.”

For May, life will soon get harder. Once Article 50 is triggered, it is the EU 27, not the UK, that will take back control (the withdrawal agreement must be approved by at least 72 per cent of member states). With MPs now guaranteed a vote on the final outcome, parliament will also reassert itself. But for now, May can reflect with satisfaction on her strengthened position.

George Eaton is political editor of the New Statesman.