New data from the UK’s Office for National Statistics show that the number of people working on zero-hours contracts throughout the country had increased by about 100,000 last year, Jo Faragher reported at Personnel Today earlier this week:
ONS reported that in the year to November 2017, there were 1.8 million contracts that did not guarantee a minimum number of hours, compared to 1.7 million in the year to November 2016. However, in terms of labour market share, zero hours arrangements still made up 6% of all contracts.
These controversial contracts, which do not guarantee employees work in any given pay period but obligate them to be on call for shifts that may or may not be assigned to them, have been the subject of intensely negative press coverage and mounting regulatory scrutiny over the past two years. Ireland has moved to regulate them nearly out of existence, while a Scottish MP has introduced legislation to ban them in the UK. The ONS’s last report on zero-hours contracts, issued last September, found that they were on a steep decline.
So what gives? Fortunately, Faragher reports, the office’s latest data almost certainly doesn’t indicate a reversal of the trend:
The UK government on Wednesday announced a series of planned labor market reforms to improve the working conditions and protect the rights of the millions of Britons employed in the gig economy and other flexible or contingent models of work, based on the findings of the Independent Review of Employment Practices in the Modern Economy, led by Matthew Taylor, which were published last July. The government says is intends to adopt almost all of the Taylor Review’s recommendations, the BBC reports:
The changes include stricter enforcement of holiday and sick pay rights, and higher fines for firms that breach contracts or mistreat staff. … The government says it is going further than the Review’s recommendations by:
- Enforcing holiday and sick pay entitlements
- Giving all workers the right to demand a payslip
- Allowing flexible workers to demand more stable contracts
The quantity and quality of jobs in the gig economy will be monitored and steps will be taken to make sure flexible workers are aware of their rights. The government is also asking the Low Pay Commission to consider a higher minimum wage for workers on zero-hour contracts, and says it may also repeal laws that allow agencies to employ workers on cheaper rates.
The reforms have not yet been fleshed out in much detail, while some of the plans announced on Wednesday involve not changing laws or regulations, but rather more strictly enforcing those already on the books. “The government’s plan will make sure that everyone knows what they’re entitled to when they start working for a company and the rules will now be enforced by HMRC, so people actually get what they’re owed,” BBC Business Correspondent Theo Leggett explains.
The controversial practice of zero-hours contracts, in which employees are not guaranteed work in any given pay period, is showing signs of rapid decline in the UK, Hayley Kirton reported at People Management this week, citing new official figures:
Data from the Office for National Statistics (ONS), published this morning, showed there were 1.4m employment contracts that did not guarantee a minimum number of hours in use in May, down a third (33 per cent) from a peak of 2.1m in May 2015. …
The [Labour Force Survey] found 883,000 people, or 2.8 per cent of all people in employment, had a zero-hours contract role as their main job between April and June 2017, compared with 903,000 people, or 2.9 per cent of all those in employment, between April and June 2016. The number of zero-hours contracts in use has also fallen by 17.6 per cent from 1.7m in May 2016, while the proportion of organisations using zero-hours contracts has dropped from 8 per cent to 6 per cent in the same time period.
Although the ONS also found that the typical zero-hours employee worked an average of 25.7 hours a week, it also found that over a quarter of them wanted more hours than they were getting. Another recent report highlighted the insecurity of employees on these types of flexible contracts, whose home lives and mental health suffer due to inconsistent schedules and incomes, and found that many of them ended up “begging” their managers for schedule changes or more hours.
Recently published research by sociologists at Cambridge and Oxford paints a dismal picture of the UK’s flexible workforce. Flexible contracts, which give hourly employees a minimal number of guaranteed hours (or none at all, in the case of zero-hour contracts), damage these workers’ home lives and mental health, and force them to beg their bosses for schedule changes or more hours to make ends meet, according to the Independent:
Dr Alex Wood, of Oxford University, embedded himself as a shelf-stacker at a UK supermarket while formerly a researcher at Cambridge’s Department of Sociology, where he experienced first-hand the “toxic” interactions between shop management and workers, witnessing employees “begging” their bosses for additional hours.
“People are put on contracts that are one or two or four hours a week, and it’s not possible for them to survive on this. But often they are hired under the assumption that they will get more hours than that,” he told The Independent. “It creates this situation whereby in order to be able to survive, people have to constantly go up to their manager and ask them for more hours, saying they can’t make ends meet without more hours, asking: ‘Please can you help me.’ Then if and when the manager helps the workers out, it means they feel very indebted to their manager to work hard.”
The Irish government’s Department of Jobs has drafted legislation that would strictly regulate the use of zero-hour contracts, in which employers are not obliged to guarantee employees any work in a given pay period, and has referred the legislation to the Attorney General for priority drafting, Patrick Walshe, an attorney with Philip Lee in Dublin, wrote at SHRM last week. While the proposed legislation has not yet been published, Walshe points to several changes it is likely to make:
- Employers would be obliged to provide certain information to new employees, including the expected contract duration, the manner in which pay will be calculated and what the employer reasonably expects the normal extent of the working day/week to be. It would be an offense if the employer fails to comply. Obviously, the requirement to provide information in relation to the normal extent of the work is to give an employee key information early on.
- The legislation would propose a new minimum floor payment of three times the national minimum wage when an employee is called into work but is not actually provided with the hours expected. This is clearly designed to discourage employers from summoning employees to work for short periods.
- Perhaps most fundamental of all, the legislation would create a new cause of action where employees could argue that their actual hours worked are not accurately reflected in their contracted hours. If there is a difference between what the contract says and what happens in practice, the employee could seek to be placed in a band of hours that is closer to the hours they actually worked.
The intention of the legislation, Walshe speculates, may be to eliminate zero-hour contracts entirely, or with very few exceptions.
The UK government’s long-awaited Independent Review of Employment Practices in the Modern Economy, led by Matthew Taylor, a former advisor to Tony Blair who was appointed by Prime Minister Theresa May to lead the review last October, published its findings and recommendations on Tuesday. The review was initiated to deal with some of the most pressing and controversial issues in the UK’s labor market today, including the advent of the gig economy and zero-hours contracts.
In a speech announcing the launch of the review, Taylor emphasized that while the UK’s economy has done well at creating jobs, the rationale of his project is to help ensure that it creates good jobs:
Our national performance on the quantity of work is strong. But quantity alone is not enough for a thriving economy and fair society. We believe now is the time to complement that commitment to creating jobs with the goal of creating better jobs. The Review calls on the government to adopt the ambition that all work should be fair and decent with scope for fulfilment and development.
Taylor’s report identifies three key challenges employers and policy makers must address to meet this goal: Addressing worker exploitation, clarifying rules and ensuring workers know their rights, and aligning the labor market with the country’s long-term industrial strategy. The report’s key recommendations include:
In the lead-up to the upcoming general election on June 8, both of the UK’s leading political parties are positioning themselves as friends of the working class. Prime Minister Theresa May, in particular, is pledging a “new deal” for British workers that she describes as the greatest expansion of employee rights by any Conservative government, Sky News reports:
Mrs May, who is trying to position herself as the politician on the side of working people, will commit to increasing the National Living Wage – currently £7.50 an hour – in line with average earnings until 2022. The Conservative party did not say how much that would mean in real terms, although George Osborne, the former chancellor, said in 2015 he expected it to hit £9 by 2020. Labour has promised to increase the National Living Wage to £10 by 2020. …
Her package will also include a commitment to protect workers’ pensions in the wake of the BHS scandal; a new right to request leave for training purposes; a right to leave for workers who suffer the tragedy of losing a child; and the introduction of returnships for people coming back into work after a period of time off. Mrs May will also change the Equalities Act to extend protections from discrimination to those suffering fluctuating or intermittent mental health conditions.
May is also promising new protections for workers in the gig economy, which has come in for increasing scrutiny and criticism in the UK lately. These new protections, Sky reports, will be based on the findings of a commission headed by Matthew Taylor, a former advisor to Tony Blair who May appointed last October to investigate the major employment issues in the modern economy.