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← Overview Database of Innovative Social Policies in Europe

Zero-hours contracts

Country of implementation
United Kingdom
General short description of the innovation
A zero-hours contract is a contract of employment which, while meetings the terms of the Employment Rights Act 1996 by providing a written statement of the terms and conditions of employment, contains provisions which create an ?on call? arrangement between employer and employee. It does not oblige the employer to provide work for the employee. The employee agrees to be available for work as and when required, so that no particular number of hours or times of work are specified. The employee is expected to be on call and receives compensation only for hours worked. / / In recent years, and especially between 2009 and 2012, this type of work contract has been increasingly used by employers (and nearly doubled) to find cost-effective ways of retaining staff and meeting short-term staffing needs. In December 2013, the Coalition Government announced plans to ban exclusive ?zero hours? contracts, which prevent employees from working elsewhere (exclusivity clause) even when they have no guarantee of work, and where employees are in practice working regular hours. At the moment, the government is working on replies to a general consultation.
Target group
Total Population
Policy Field
  • wage
Type of Policy
  • other (practice that can be found in public and non-public sphere and is covered by labour law)
Scope of innovation
General description of (intended) objectives and strategies
Zero-hours contracts provide wide flexibilities for employers to use staff when needed and only pay them for the time employees worked for them.
Type of innovation
  • retrenchment or expansion of an existing/earlier policy
New outputs
  • working time
Intended target group
employees
Working age population
  • main source of income: paid work
Actors involved in policy-making/implementation and/or evaluation
  • employers (organised or individual)
Intended output
  • working time
Clarification of outcomes in terms of impacting resilience and labour market inclusion
Figures from the Office of National Statistics (ONS 2014) show that in 2013, 582,935 workers were on the zero-hours contracts (ZHC) ? a number three times higher than in 2010. Especially the number of 16 to 24 year olds on this type of contract has more than doubled since the beginning of the economic downturn (Pennycook et al. 2013). / / Opinion on zero-hours contracts has been mixed. Employee organisations tend to argue that the contracts result in financial insecurity for workers who lack key employment rights; employer organisations stress their utility when seeking to meet fluctuating demand and argue that they play a vital role in keeping people in employment (Piper and McGuiness 2014). Trade unions generally pointed out that ZHC are often at the employee?s disadvantage since they do not provide any financial stability and can even negatively affect eligibility to various support benefits (e.g. JSA). It would also leave employees at the disposal of their employers to respond to calls to attend work at short notice, and employees on ZHC do not profit from the same employment rights as those on traditional contracts. Some of these concerned are elaborated by Piper and McGuiness (2014) who highlight that employment status is rather unclear, ie whether or not those working under such contracts are ?employees? or ?workers?. ?Persons with employee status are afforded a number of important legal rights which workers are not, such as the right not to be unfairly dismissed, maternity rights, redundancy rights and rights under the Transfer of Undertakings Regulations 2006? (idem:5). It would also be unclear if these persons would have to be paid the National Minimum Wage whilst they are on call. / / A rather controversial research by the Chartered Institute of Personal and Development (CIPD) found that a majority of people on ZHC to have positive experience (CIPD 2013). The survey also suggests that the ONS might still be underestimating the figure saying that 1 million workers are on the contracts. The ONS has acknowledged that official figures for zero hours contracts are likely to be underestimates and has said that new survey questions will be introduced from autumn 2013 to generate more robust data. / / / Sources: / CIPD (2013). Zero-hours contracts: myth and reality, research report, November 2013, London. / ONS (2014). Zero Hours Analysis, available: http://www.ons.gov.uk/ons/about-ons/business-transparency/freedom-of-information/what-can-i-request/published-ad-hoc-data/labour/march-2014/zero-hours-analysis.xls [accessed 10 April 2014] / ONS (2013). Estimating zero-hour contracts from the Labour Force Survey, July 2013, available: http://www.ons.gov.uk/ons/guide-method/method-quality/specific/labour-market/articles-and-reports/zero-hours-contracts.pdf [accessed 10 April 2014] / Pennycook, M. et al. (2013). A matter of time. The rise of zero-hour contracts. Resolution Foundation. / Piper, D. and McGuiness, F. (2014). Zero-hours contracts, House of Commons Library Briefing, 10 March 2014. / Unite (2013). Zero hours contracts brief, August 2013. / Work Foundation. Key facts about zero hours contracts, available: http://www.theworkfoundation.com/Research/Socio-Economic/Zero-hours-contracts/Key-facts-about-zero-hours-contracts [accessed 10 April 2014]
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