Workers should get the right to move off zero-hours contracts after a year

Workers who have been on a zero-hours contract for at least 12 months should be given the legal right to switch to a fixed hours contract if they’ve worked regular shifts during that time, recommends a new report into the controversial employment practice.

The report from independent think tank the Resolution Foundation is the first to propose a comprehensive and balanced set of recommendations for the reform of zero-hours contracts – those which do not guarantee any hours of work. The government is expected to announce the outcome of its review of zero-hours later this Spring.

The Resolution Foundation report rejects both the case for banning zero-hours contracts outright as well as the status quo. It finds that many employers, and some workers, appreciate the flexibility they can give and there is still not enough known about their prevalence to justify rushing to ban them.  But it argues that there are clear signs of abuse and poor practice and, therefore, makes key recommendations which, applied right across the economy, would offer more security and transparency for many workers while retaining flexibility for employers.

Today’s report makes five economy-wide recommendations:

• Staff on zero-hours contracts should have the right to a fixed hours contract after 12 months of employment provided their weekly work pattern has been relatively consistent
• A ban on exclusivity clauses in zero-hours contracts should be introduced – stopping employers who offer staff no guaranteed hours but also prevent them working elsewhere
• Everyone employed on a zero-hours contract should receive a statement of their terms of employment to make them aware they have no guaranteed hours of work
• A good practice guide should be agreed by unions and employers working with Acas which would set out the consequences of using zero-hours contracts and advice on how they can be used fairly
• The government should prioritise enforcement of employment rights and better sharing of information between agencies  to deter abuses by employers

There is still uncertainty over the number of workers employed on zero-hour contracts with official estimates being revised upwards to around 600,000 while other studies have put the figures as high as 1 million.  In many cases workers have not realised they are employed on zero-hours contracts until their hours have been changed. And though part of the use of zero-hours contracts is likely to be cyclical – and therefore related to the economic downturn – they are also a structural feature of some important sectors and their use is likely to remain a significant part of the labour market even during a sustained recovery. The Resolution Foundation report says it will be several years before the full extent of zero-hours contract is fully understood.

The report also makes specific recommendations for publicly funded sectors where the use of zero-hour contracts is often prevalent and where, as with care work, the use of zero hours contracts should be scaled back:

• Local authorities should commission care work by outcomes rather than by time slots to give providers greater control of their own staffing patterns and focus attention on quality of care
• The terms of conditions of workers should be included in considerations of social value when care contracts are awarded as required under the Public Services Act 2012 and new EU Procurement Directive
• Local authorities should play a more strategic role in shaping the local care market so that care firms can offer workers more choice between zero-hours and fixed-hour contracts

Vidhya Alakeson, joint author of the report and deputy chief executive of the Resolution Foundation, said: 

“The argument that nothing can be done to address the inappropriate use of zero-hour contracts is as unconvincing as that which says that they should just be banned outright.   These proposals strike a balance, keeping the flexibility that some people value and adding far more security and clarity for workers. With these practical steps and an effort to develop good practice among employers it should be possible to protect the rights and conditions of workers without limiting the flexibility of firms.

“Not all firms misuse zero-hours contracts and a few staff even prefer them but it’s clear there’s substantial abuse of these contracts which affects a significant minority of the workforce.  In particular, there is no justification for keeping a regular worker on a zero-hours contract for more than a year.

“We single out the care sector for particular attention because this is where it will be hardest to reduce the use of zero-hours contracts but also the place where their use is most entrenched and where their impact on vulnerable workers and care recipients is most worrying.”

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