Worrying rise in staff on zero-hour contracts

This is undoubtedly good news – but there is a footnote that warrants some attention: a further increase in the number of people on zero-hours contracts.

This now stands at around 910,000, an increase of 20 per cent in the last year and a continuation of an exponential increase in such contracts since 2012. This means that 2.9 per cent of people in work are now on zero-hours contracts.

Whilst there are signs that the very sharp rise in such contracts is beginning to slow as European workers begin to leave the UK and the labour market tightens, this remains an issue that requires serious attention.

Zero-hours contracts do not guarantee that workers will be offered any work within a given period. What they are offered may vary widely. They provide no income security for those who need it. There has also been an increase in the number of limited hours contracts. These might specify that an employee will get at least, say, 13 hours a week, but will not specify when those hours will be.

Nonetheless, the employee will need to be available when required, making it very difficult to also hold down another regular part-time job. Our flexible labour market is one of the things which makes us competitive and a place where people want to be in business. Flexibility can be good for employees, giving them the freedom to spend time on other things – if that’s what they want.

Flexibility and freedom are generally good things, but there is often a thin line between freedom and exploitation. The role of government is to protect our freedoms and protect us from exploitation.

The TUC has said that an average employed worker earns 50 per cent more than someone on a zero-hours contract. The issue was summed up by the think-tank the Resolution Foundation which said that “the challenge now is to ensure that these still popular contracts are reserved for cases of genuine desired flexibility for worker and employer”.

The Institute of Directors (IoD) campaigns for better corporate governance and is committed to director development and training. Directors should be making the right decisions for their businesses and all stakeholders, including employees.

With respect to zero-hours and limited hours contracts, if directors don’t feel the line between freedom and exploitation is currently in the right place, or that law and best practice has failed to keep up with developments, then, in my opinion, they have a duty to make sure the line is not crossed in their own businesses.

It is interesting to note that, following on from the well-publicised Uber court cases and the question of whether workers are truly self-employed, the government has indicated that it will look at these issues.

It is proposing to take steps to prohibit the exploitation of “self employment”, where such arrangements really reflect an employed status.

The government needs to take a similar look at the abuse of zero and limited hours contracts if it wants to back up its claim to be the party of those who want to work.

If this article is another nail in the coffin of the abuse of these contracts I am happy to hammer the point home.