Increase in use of zero hours contracts

31st August 2013 At the beginning of August the Business Secretary, Vince Cable, expressed concern over the recent increase in the use of zero hours contracts.

Mr Cable said that he was concerned about "some exploitation" of staff on zero hours contracts- ie contracts that do not guarantee set shifts or work patterns.

Based on a survey of 1000 firms the Chartered Institute of Personnel and Development has estiamted that some 4% of the UK workforce are employed under zero hours contracts. 

The Government has been carrying out consultation on the use of these forms of contracts, and has indicated that it will decide in September whether to hold a formal consultation on specific proposals. 

Zero hours contracts can take a number of forms. The Chief Executive of CIPD has said that he believes that even some employers are not really sure of the actual nature of their staff contracts, and in particualr whether a contract is actually a zero hours contract or not. He indicated that further guidance on such contracts would be welcome.

Zero hours contracts can provide flexibility for employers, but it should be remembered that they also can provide some flexibility for individuals. For employers they may be suitable where demand fluctuates.The practical issue for the individual employee is really the matter of how much notice they are given by the employer that they are required to work on a particular day or shift. Organised effectively the use of zero hours contracts can enable an individual to manage work with other commitments, and so can provide more flexible working opportunities than the traditional full time or part time, fixed hours model. However, this very flexibility is not suitable for those people that need certainty in their hours and earnings. Hotels, catering and the leisure industry are the industries that often use zero hours contracts. The Office of National Statistics have produced figures which indicate that the number of young workers on zero hours contracts has doubled during the recent recession. Younger workers seem to be much more likely than other groups to be employed on zero hours contracts. It can be argued that these contracts do at least provide work and the first step on the career ladder when fixed set hours are not available.

It remains to be seen if the Government will review the use or nature of zero hours contracts. In any event is important that employers realise that the use of zero hours contracts is not a measn of avoiding all employment law rights for their workers. For example the staff on zero hours contracts will still accrue entitlement to paid holiday.

If you need any guidance on the issues raised in this article do not hesitate to contact us at Hallett Employment Law Services Ltd.