Zero-Hours Contracts Falling Out of Favor Among UK Employers

Zero-Hours Contracts Falling Out of Favor Among UK Employers

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.

Zero-hours contracts have attracted widespread controversy in the past year, after an investigation by the Guardian revealed that Sports Direct, the UK’s largest sportswear retailer, was effectively paying some of its employees on zero-hours contracts less than the statutory minimum wage. The scandal prompted Sports Direct and other major British employers of hourly workers to abandon zero-hours contracts shift to a system of guaranteed hours for their employees. The latest ONS figures suggest that many organizations are reconsidering these arrangements.

The UK government is also mulling regulations that would not ban zero-hours contracts but would give additional rights to this category of employees: In its report issued in July, the Independent Review of Employment Practices in the Modern Economy, led by Matthew Taylor, recommended that zero-hours workers be entitled to request guaranteed hours after working for their employer for 12 months, and that a higher minimum wage be established for non-guaranteed hours.

Critics of the report, such as the Trades Union Congress, objected that these proposals were insufficient to solve the problems facing these employees. The Irish government, by comparison, recently proposed legislation that would regulate zero-hours contracts so tightly as to make them practically impossible in most circumstances.