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A Matter of TimeThe rise of zero-hours contracts

June 2013

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A Matter of Time……………………………………………………………………………………………………..

• What are zero-hours contracts?

• The growth and spread of zero-hours contracts

• Implications for the UK labour market and the wider economy

• Why are growing numbers of employers using zero-hours contracts?

• The impact of increased zero-hours contract use on those who work on them and the services they provide

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The growth of zero-hours contracts……………………………………………………………………………………………………..

Trends in zero-hours contract useNumber of people on zero-hours contract, 2006-2012

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The spread of zero-hours contracts……………………………………………………………………………………………………..

The distribution of those working on zero-hours contractsDistribution of employees by zero-hours contract status by industry, 2012

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Implications for the UK labour market and economy

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Those employed on zero-hours contracts:

• Work fewer hours on average (21 hours per week) than those who are not (32 hours per week) and are more likely to be looking for a new or additional job

• Receive lower gross weekly pay (an average of £236 per week) compared to those who are not (£482 per week)

• Have a lower gross hourly wage (£9) than those who are not (£15)

• Are more at risk of being low paid (half of those on zero-hours contracts are low paid compared to 23% of those who are not)

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Why are more employers using zero-hours contracts?

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Zero-hours contracts allow employers to:

• Maximise the flexibility of their workforce so that it can more easily adjust to variations in demand

• More successfully manage risk

• Reduce the costs associated with recruiting and training staff

• Avoid particular employment obligations

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The impact of zero-hours contracts on employees and workplaces

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“Many of my colleagues who are raising families have got into serious debt from working on zero-hours contract because they cannot be sure what they’ll get in each month. Those who’ve avoided debt have done so by living with parents, drawing on savings, having redundancy pay from previous jobs to fall back on”.

- FE lecturer, Bradford

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The impact of zero-hours contracts on employees and workplaces

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“When I started out at my current job I did nine weeks without a single day off and I was regularly working anything up to 55-60 hours a week. Since putting my foot down and refusing to work every other weekend – I still do 12 days on with 2 off – my hours have dried up”.

- Domiciliary care worker, Newcastle

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The impact of zero-hours contracts on employees and workplaces

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“I have no faith or commitment to the company since they put us all on zero-hours. All the girls who had their contracts changed feel the same. And it definitely has an impact on the care we provide…now everyone is worried and looking for other jobs and that rubs off on patients”.

- Day Services Support Worker, Kendal

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Where next?……………………………………………………………………………………………………..

Government review of zero-hours to conclude in the autumn:

“For some these can be the right sort of employment contract, giving workers a choice of working patterns. However, there has been anecdotal evidence of abuse by certain employers, including in the public sector, of some vulnerable workers at the margins of the labour market.” - Vince Cable MP, Secretary of State for Business,

Innovation and Skills

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A Matter of TimeThe rise of zero-hours contracts

June 2013

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#zerohours