Are zero hours contracts here to stay?

It is not surprising that at the end of the longest economic downturn the UK has ever faced to see an increase in the number of people on zero hours contracts. In uncertain times, employers have turned to these contracts to weather a difficult economic climate. By not guaranteeing employees a set number of hours of work, zero hours contracts allow employers to respond flexibly to demand. Local Authorities have found them similarly useful in the face of budget cuts and an uncertain future for many council services. The question for the coming years is whether, as the economy starts to recover, zero hours contracts are here to stay.

The truth is that no one knows exactly how many people are on a zero hours contract. An updated estimate from the Office for National Statistics last week indicated that it is 250,000 whilst a new survey from the Chartered Institute of Personnel and Development suggests that as many as 1 million workers could be employed on them. Part of this uncertainty is because large numbers of people on zero hours contracts do not know that this is the type of contract they have and are, therefore, unlikely to identify themselves as being on a zero hours contracts. This makes it highly likely that national surveys underestimate the real number. Across local authorities, Unison estimates that almost all councils use zero hours contracts but councils cannot know how widespread use is among private and voluntary sector providers who deliver council services such as social care. A recent Resolution Foundation report found that the largest number of zero hours workers are in the care sector .

By virtue of not guaranteeing a set number of hours of work for individuals, zero hours contracts can create tremendous uncertainty for workers, particularly those with children who are more reliant on a stable income. Fluctuating earnings make even basic household budgeting difficult and can make planning for things like childcare impossible. But where the most pernicious problem with zero hours contracts lies is in their use as a management tool. Where hours are offered or taken away on the basis of reward or punishment, workers find themselves unable to exercise even their basic rights or access entitlements such as holiday and sick pay. A complaint may lead to a loss of hours; a refusal to work a particular shift may result in the same, as might a request for time off. Managers wield the ultimate power of being able to offer much needed hours of work or take them away.

This kind of insecurity and anxiety is not just bad for workers and their families, it has a direct impact on those who receive services. This is not to question the professionalism of workers, many of whom deliver excellent services against the odds. But it is hard to see how insecurity for workers does not feed through to those receiving services, particularly at the bottom end of the market where insecurity is coupled with low wages. Recent research has highlighted how the growth of zero hours contracts in social care is one reason for an increase in the non-payment of the minimum wage in the sector. Cuts and current commissioning strategies clearly also play their part.

There is an understandable view in the current economic climate that any job is better than no job. But as the economy recovers, if the use of zero hours contracts does not diminish, there is a strong rationale for moderating their use to ensure greater transparency for workers and a reduction in their use as a management tool. This should be the focus for the current government review.

This article originally appeared on The Guardian