Zeroed out – time for stronger action on zero-hours contracts?

Secure and well-paid work is the basis for thriving communities, and the basis for a successful economy.

But, a year on since I published my independent review into zero-hours contracts for the Labour Party, there is evidence of a new surge across the economy. Official statistics show that there are now 1.8 million zero-hours contracts in the UK. There has been an increase of nearly 20 per cent in the number of people on a zero-hours contract in the past year alone.

In many cases these contracts are not being used as temporary tool to manage seasonal fluctuations in demand, but as a permanent workforce management tool to reduce costs. Some companies are hiring the vast majority of their workers on zero-hours contracts, even though they have predictable and manageable fluctuations in demand.

Research by the CIPD suggests that 92 per cent of workers on zero-hours contracts have a typical length of service of more than three months, and many of these employees work regular hours in practice. The average actual hours worked by people on zero-hours contracts is about 23 hours a week, according to the ONS.

This evidence highlights that the problem of exploitative zero-hours contracts has not gone away since my calls for action a year ago.

I recommended that workers should be given a right to a fixed-hours contract after they had worked continuously for a period of time. I had hoped at the time that giving people this right after 12 months would be enough to tackle the problem. But the surge in these practices over the past year calls for stronger action, with too many employers using zero-hours contracts to minimise costs or avoid their responsibilities to staff.

Having consulted, it has also become clear that we need to minimise the opportunities for gaming, with unscrupulous employers able to concoct complex contracts to get around the rule. A 12 week rule would bring this in line with the Agency Workers Directive and other elements of employment law, minimising the opportunities for this ‘gaming’.

Stronger regulation to stamp out exploitative zero-hours contracts is not just good for employees, it is also good for employers and the country, helping employers to invest and raise standards without being undercut. We need to stop the accelerating jobs spiral to the bottom, where our economy has insufficient investment in the quality jobs the nation needs. That is how we will compete in the world.

Norman Pickavance is the author of “Zeroed Out: The place of zero-hours contracts in a fair and productive economy”