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New analysis of zero hours contracts condemns government review as inadequate

Angelo Evangelou

28 August 2013

A new report, Flexibility or insecurity? Exploring the rise in zero hours contracts, published today (28 August) by The Work Foundation calls for a more systematic investigation into zero hours contracts than the review commissioned by Business Secretary, Vince Cable. The report looks at the nature of zero hours contracts (ZHCs), describes how existing official statistics are unreliable, and provides a detailed analysis of the available data setting the wider context of such contracts. The report concludes that a more in-depth review is required to identify their full extent and how and why they are being used

The report’s author, Ian Brinkley (director of The Work Foundation) asserts that calls to ban zero hours contracts for reasons of bad employment are misplaced, as is the view that they are a uniquely exploitative form of contract. The analysis illustrates that those on zero hours contracts are more likely to be part of the permanent workforce than in temporary employment relationships. He also suggests that UK and OECD economies have previously chosen to regulate and legislate where necessary and encourage good practice rather than restrict or place an outright ban.

The report shows that while many would expect their use to be more common among temporary low-paid work, the reality is far more nuanced. The analysis illustrates how the picture varies from sector to sector. For instance, in low-paid work, their use is common in hospitality – where it is reported in nearly 20% of workplaces - but rare in retailing – where it is 6%. The report also reveals:

·         Just under 18% of those on ZHCs said they were looking for alternative employment, compared with 7% of all employees.

·         60% of care-workers were on ZHCs in 2011-2012 compared with about 50% in 2008-2009.

·         ‘Nurse banks’ work well and most respondents were satisfied with their working pattern (86% reported that bank/agency work suits them well).

·         A significant share of those on ZHCs (43%) are  in the top three occupational groups (managers, professionals and associate/technical staff). A fifth (17%) were manual skilled or semi-skilled jobs and just under another fifth (17%) were care, leisure or sales jobs. Just over one in ten were unskilled and just over one in ten were administrative.

·         Incidence is highest in hospitality, where ZHCs are reported in nearly 20% of workplaces; however, they are less common in the retail industry, in business services and public administration at between 4% and 6% of all workplaces.

·         44% had remained for two years or more with the same employer and 25% for five years or more; 75% had been in a job for more than two years.

·         While just over 25% of people on ZHCs said they would like to work more hours, three quarters of ZHC workers did not want more hours.

·         75% of those on ZHCs say their hours vary each week, compared to 40% of employees not on ZHCs – so while those on ZHCs clearly experience a much greater degree of hours variability, many on conventional contracts also face variable weekly hours.

·         CIPD survey found that 19% of employers were using them in July 2013. This is much higher than the estimate from the 2011 Workplace Employment Relations Survey which suggested they were in just 8% of workplaces.

 

Ian Brinkley said:

“In spite of the ONS figure increasing to 250,000 following their adjustment and the CiPD survey estimating around a million people are on such contracts, much confusion still remains. There are vast numbers of workers who are unaware they are on zero hours contracts. We still don’t know how many have taken them by choice and how many out of necessity. Nor do we yet understand the true reasons why employers are making more use of them.

“The investigation announced by Vince Cable is inadequate. We favour a far more systematic approach – perhaps along the lines of the Hutton Fair Pay Review which The Work Foundation would again be happy to support. A fuller investigation would enable accurate analysis and such data would help devise effective policy measures and map out best employer practice to protect workers most vulnerable to potential abuse.”

 

Ends

Notes to Editors:

1.     Flexibility or insecurity? Exploring the rise in zero hours contracts is available at www.theworkfoundation.com or from the media team in advance of publication.

2.     The report’s author Ian Brinkley is available for interviews, briefings and written comment.

3.     The report uses data from the Labour Force Survey and the Workplace Employment Relations Survey.

4.     The table below shows key characteristics of workers on ZHCs.

5.     The Work Foundation aims to be the leading independent, international authority on work and its future. The Work Foundation is part of Lancaster University – an alliance that enables both organisations to further enhance their impact.

6.     An infographic of the key data on ZHCs is available on The Work Foundation’s website and a chart below shows the characteristics of those on ZHCs.

 

Media enquiries:

Angelo Evangelou 020 7976 3597 aevangelou@theworkfoundation.com

Anna Kharbanda 020 7976 3646 akharbanda@theworkfoundation.com

For urgent out of hours media enquiries please call Nasreen Memon on 07825 527 036

 

Characteristics of workers on ZHCs

Characteristic

ZHC contracts

Non-ZHC contracts

Permanent

71%

93%

Two years or more

44%

75%

Less than six months

21%

8%

Weekly hours vary

75%

40%

Looking for another job

18%

7%

Would like more hours

26%

11%

Full-time students

26%

11%

Note: two years or more and less than six months are with current employer

Source: analysis from The Work Foundation of the Labour Force Survey, 2012 Q4