Zero-hours contracts offer no guaranteed hours or income, and their use in female-dominated industries is growing.
These are contracts in which an employer does not guarantee the employee a fixed number of hours per week, but the employee is expected to be on call and receive payment only for hours actually worked.
The government is currently reviewing the use of zero-hours contracts and Andy Sawford MP has introduced a Private Members’ Bill calling for them to be banned.
Zero-hours contracts offer no guaranteed hours or income. The employer does not have to offer any hours and, in theory, the employee does not have to accept them.
Some argue that this allows more flexibility, but there is less certainty.
The use of zero hours in the UK has grown in recent years.
Introducing the report, Matthew Pennycook, senior research and policy analyst at the Resolution
Foundation, said 140,000 workers were employed on these contracts in 2006, in 2012 there were over 200,000.
This is likely to be an underestimation because zero hours are common in industries like home care, which, according to the
Office for National Statistics, employs over 650,000 people, 84 per cent of whom are women.
And their use is spreading.
In the past zero-hours contracts were confined to low-paid and low-skilled work like home care and hospitality; they are now spreading to white collar jobs like further and higher education and administration.
According to the research, workers on zero-hours contracts are more likely to have lower pay even if they are graduates in relatively skilled jobs, work fewer hours and to be looking for another job or for extra hours.
The authors claim zero-hours contracts are used to reduce costs, and to avoid some elements of employment protection.
Workers on zero-hours contracts tend to have worker, rather than employee, status allowing employers to avoid benefits like maternity pay.
While some people may welcome the flexibility, being on a zero-hours contract has a negative side.
One further education lecturer told the researchers: “Many of my colleagues who are raising families have got into serious debt through zero-hours contracts because they cannot be sure what they will get in each month.
“Those who have avoided serious debt have done so through living with parents, drawing on savings, having redundancy pay from previous jobs to fall back on.”
With such fluctuating hours it can be difficult for workers to prove how many hours they work, making it difficult for them to claim tax credits. Workers who refuse hours may find themselves penalised.
A home care worker said: “When I started out my current job I did nine weeks without a single day off and
I was regularly working anything up to 55-60 hours per week.
"Since putting my foot down and refusing to work every other weekend, I still work 12 days on and two off, [but] my hours have dried up.”
All this uncertainty affects the quality of service.
Another care worker said: “I have no faith or commitment to the company since they put us on zero
hours.
“All the girls whose contracts changed feel the same. And it definitely has an impact on the care we provide.... Now everyone is worried about looking for other jobs and that rubs off on patients.”
Professor Jill Rubery, head of the people management and organisation division at Manchester Business School,
surveyed 52 home care providers.
Nearly 70 per cent of the employers she surveyed only offered zero-hour contracts. Guaranteed hours were only available to those transferred from local authorities or car drivers. Only 13 per cent offered all staff guaranteed hours.
Over 80 per cent of the employers surveyed offered no pay for travel time; many workers have to pay travel costs; if a client is temporarily hospitalised the worker would lose the hours, and therefore the income; and 88 per cent of the employers did not pay for breaks between clients.
“Any absences of care staff, or new clients leads to the constant renegotiation of who was going to cover, so even when a worker was on an unpaid break they would be constantly rung up and asked to work, so even when you are on an unpaid break you would be constantly reminded of being at work.
“The result is working days that are extremely long.
"Many start at seven in the morning and finish work after ten at night with multiple breaks in between. Six and seven-day working is common. If they provided more care than was commissioned that was at the cost of their own time,” she said.
Rubery believes that budgets cuts mean risk is shifting from local authorities to care providers and on to the workers, resulting in high staff turnover and difficulties with staff recruitment, which can lead to poor performance.
“It is quite sobering that the sector that has the sharpest employment practices in the country is one that is taking care of our most vulnerable people,” said Sarah O’Connor from the Financial Times, who chaired the report's launch event.
Heather Wakefield, head of Unison Local Government said zero-hours contracts were being promoted as a way of saving costs in local government, and were likely to spread to the NHS following the introduction of the ‘any qualified provider’ regime.
“If you look at local government most of the jobs are part time. These are jobs that were constructed with the growth of the welfare state after the Second World War to be part time. That little, local part-time job mainly for women,” she said.
She said some workers were asked to provide their own uniforms, mobile phones and cars. Some even had to pay for the badge of the multi-national care company to be sewn onto their uniforms.
Matthew Oakley, head of economics and social policy at Policy Exchange, argued that zero-hours contracts should not be regarded as universally bad: having a job was better than not having one; some people may like the flexibility that zero-hours contracts offer and they may offer a stepping stone into work.
Banning them could lead to an increase in other precarious forms of employment such as agency work, which offer even less employment protection.
But Professor Guy Standing, author of
The Precariat: The New Dangerous Class, said the official unemployment rates underestimated the ‘labour slack’ rate, times when workers are effectively out of work, but officially employed.
He called for the introduction of a basic income for all, and for employers to pay a standby bonus during leaner times. Those employing workers on zero-hours should pay a higher bonus.
He said that, in the short term, anyone who quits a zero-hours contract should not be penalised when applying for unemployment benefits and unemployed people should be able to refuse an offer of a zero-hours job, without risking losing their benefits.
In the long term people need a degree of security and a collective voice.
“These forms of highly exploitative labour are very unfairly distributed," he said.
“It is vital for us to reconceptualise what we mean by work. Every feminist, and I hope we are all feminists, should be shouting from the rooftop. All these politicians when they talk about work are only talking about paid work.
“A lot of these people on highly insecure contracts have to do a lot of work that does not get counted as work and does not get remunerated as work. This is a form of indirect exploitation,” he said.
