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Zero-hours contracts: “flexibility” is not a draw for the majority of workers

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A report recently undertaken by three labour market economists has found that 44% of workers on zero-hours contracts would like more working hours. In addition, and in contrast to the “flexibility” argument often put forward in support of the use of zero-hours contracts, only 28% of those surveyed saw flexibility as the basis for entering into one.

Economists Nikhil Datta, Giulia Giupponi and Stephen Machin from the Centre of Economic Performance conducted the study of 20,000 people in the UK on zero-hours contracts.

The report suggests one reason employers are using zero-hours contracts is to buffer the effect of the increase in the national minimum wage for workers over 25 earlier this year to £7.83 an hour. However, those backing the use of zero-hours contracts would argue that employers often use zero-hours contracts to meet budgetary restrictions which mean that otherwise they could not afford to hire the worker.

This report draws further public attention to workers’ concerns about the low pay and lack of job security a zero-hours contract brings. Indeed, by their very nature, zero-hours contracts mean an employer is not obliged to provide any minimum hours and the worker is not obliged to accept any work offered. The research found that 30% of workers were not on zero-hours contracts out of choice but because they often had no option other than to accept the contract because of a lack of job opportunities.

This research comes less than a month after the Institute for Public Policy Research Commission on Economic Justice found a business culture of low wages and short-term profit is holding the UK back and recommended workers on zero-hours contracts be paid 20% above the Living Wage rate.

Despite the fact that there has been much in the mainstream press about the negative side of zero-hours contracts, they can still offer advantages for employers and workers alike, and there is estimated to be almost one million workers in the UK who work under them. However, with more workers seeking stability and a regular income, it is questionable whether zero-hours contracts suit the needs of all those workers that currently have them. Employers should therefore be conscious of a possible future that sees a decline of zero-hours contracts in their workplace, especially following the Labour party’s pledge in April last year to ban zero-hours contracts.

If you have any concerns about zero-hours contracts following recent headlines like these, please contact one of the team.