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Zero contract hours

Flexible working practices are on the increase, and one method in particular is causing quite a stir…

Zero contract hours, under which an employee is required to be available for work as needed, only paid for the hours worked, and has no guaranteed hours each month, is on the rise – with more than 200,000 zero-hours workers now in the UK, up from 131,000 in 2007.

In 2011 23% of Britain’s major employers recruited staff on zero-hours contracts, compared with 11% in 2005.

This sort of arrangement is popular with fast food chains and high street stores but also increasingly within public services, including the NHS, with the number here having risen by a quarter in two years to almost 100,000.

These figures also fail to account for those who simply don’t realise they are on zero contract hours, considering themselves to be employed on a casual basis. In addition, it is thought that these figures will continue to rise, as employers increasingly try to find cost-effective ways of meeting short-term staffing needs.

Zero-hours may suit those who only want occasional earnings, and who can be entirely flexible about when they work, and can prove useful to employers who need to maintain a flexible workforce, as it provides a pool of people who are ‘on-call’ to be used when required.

However, the arrangement is the source of a significant amount of controversy at present, with Business Secretary Vince Cable recently announcing a review of the practice.

His concern is that companies are misusing zero contract hours to get away with paying their employee less, by blurring the lines over what is classed as ‘working time’ – requiring employees to stop work but stay on the premises during quiet times in case they are needed. This exploitation of workers makes it likely that both the National Minimum Wage Regulations and the Working Time Directive are being flouted, but with little information about the current impact of zero-hours more work is needed to ensure that workers are protected.

This, coupled with the lack of job security (with anecdotal evidence suggesting that some companies use an individuals availability to work as a mechanism for either allocating or withholding future hours), means that zero contract hours has the potential to put individuals under a great deal of stress.

The review will invite trade unions, major stores and fast food chains to assess the effect of the increase of the zero hours arrangement, and see if and how the law needs to be tightened to avoid exploitation.

While a ban on zero contract hours is unlikely, as some workers prefer to be on call and to work only occasionally, it is thought that their use may be restricted and further safeguards put in place to ensure workers receive basic employment rights.

“There is evidence to suggest that good HR practice and people management in SMEs are key factors in strong business performance and can lead to increased productivity.”

- CIPD people Skills Project 2017


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