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Use of Zero Hours Contracts May Fall After Recent Rise

According to figures released by the Office for National Statistics, the total volume of UK workers employed via zero hours contracts has climbed to a new height of 910,000 during 2016. This is a 14% increase over the figures recorded for 2015, with 105,000 additional workers employed this way. This rise is even more surprising given how just 100,000 UK workers were employed via zero-hours in 2005

Zero-hours contracts are often criticised by employment law experts, who believe they reduce worker rights by not guaranteeing regular work shifts and denying workers the same rights as their fully-employed colleagues.

The increase of workers on zero-hour contracts peaked during the first six months of 2016 before slowing down considerably to 0.8% during the second half of the year.

This sudden change from high to low could be the result of a negative reaction by employers against hiring foreign workers in the aftermath of Brexit, which has made it much harder for EU workers to find UK employment. Another potential reason for the drop might be that employers have seen how zero-hours contracts have come under fire at tribunal in recent months.

Sports Direct was widely criticised after tribunal ruled in favour of a worker who claimed its zero-hours arrangements were unlawful. There has also been a rise in tribunals targeting gig economy businesses, such as Deliveroo and Uber, who have lost high profile cases involving employment rights. Many gig economy businesses plan to appeal their rulings, but a successful review looks uncertain after UK plumbing firm Pimlico Plumbers lost its appeal at tribunal in January 2017.

Many popular British businesses have now changed their contracts. Homebase has ceased its reliance on zero-hours employment and JD Wetherspoon has announced that workers on zero-hours contracts can now extend their employment to full employment if they want.

The Resolution Foundation’s policy analyst, Conor D’Arcy, believes this latter cause to be the contributing factor:
‘The negative publicity these contracts have attracted may well have played a role in their slowdown, as firms rethink their use’.

The financial crisis of 2008 was largely responsible for the rise in zero-hours contract usage, as dire employment prospects made workers desperate for work and therefore likely to sign contracts they would have otherwise rejected. Use of these contracts did not diminished even after the UK economy began to recover, as many employers continued using them despite the potential problems they cause workers.

Unite, the UK’s largest Trade Union, is encouraging the government to outlaw the use of zero-hours contrasts. New Zealand has already enforced this.

Len McCluskey, the general Secretary of Unite, the UK’s largest Trade Union, has stated:
‘There are now close to one million people in the UK on zero-hours contracts. That’s one million people with no job security, who are earning less than people in stable work and who, from week to week, do not know what they will have to live on’.

The government recognises the difficulties such contracts present to workers. Last year Theresa May instructed Matthew Taylor, a former policy member of the Blair administration, to undertake a review into how workers’ rights have been compromised by recent employment law, with zero-hours contracts as a key part of the investigation.

Despite the large amount of criticism brought down on zero-hours legislation, some workers actually value this form of employment. Workers within the age bracket 55-64 make up nearly half of the recent zero-hour increase, largely because many older workers are closer to retirement age and purposefully seek less working hours.

The Resolution Foundation acknowledges that there are some workers who feel they benefit from zero-hours contracts, an that a compromise is required so no-one’s rights are challenged. Conor D’Arcy believes the following:

‘For some of these workers, zero-hours contracts may offer a flexible transition from full-time work to retirement, allowing them to top up their income […] The challenge now is to ensure that these still-popular contracts are reserved for cases of genuine desired flexibility for worker and employer.’

Are you employed on a zero-hours contract? Let us know how you feel about using them in the UK workplace.