Counting Zero Hours Contracts

The latest figures on zero hours contracts have attracted much negative press as politicians seek to score points and woo voters. But are zero hours contracts really all that bad?

As with most things that politicians like to paint in black and white, there are pros and cons and nuanced positions that get lost in the heat of political debate.

While there are clearly downsides for certain types of workers due to the insecure nature of these contracts, they also provide some with a degree of flexibility difficult to otherwise attain.

Employers can also benefit from that flexibility.

Defining Zero Hours Contracts

Despite the apparent certainty in the language used by commentators when discussing zero hours contracts there is actually not a strict legal definition for them. That gives considerable scope for different organisations and parties to measure their use in different ways.

The main criteria that unites different forms of contracts under the zero hours umbrella is that they are contracts in which the employer does not guarantee any work in a given week and the employee does not have to accept any of the work that is offered to them. Although sick pay is often excluded, holiday pay should be included under the working time regulations.

The Government’s consultation on zero-hours contracts defined them similarly as follows: “In general terms, a zero-hours contract is an employment contract in which an employer does not guarantee the individual any work and the individual is not obliged to accept any work offered”.

The Latest ONS Figures on Zero Hours Contracts

In the period from October to December 2013 the ONS estimated that nearly 2% of the UK workforce was employed on the basis of zero hours contracts. That equates to around 583,000 people. The figures were estimated from the Labour Force Survey which is a survey of employees.

The most recent figures from the ONS which were based on a survey of businesses, i.e. employers, for the period from January to February 2014 estimated that there were nearly 1.4m zero hours contracts in effect; a huge discrepancy.

The wide discrepancy is unlikely to be indicative of a great surge in the use of zero hours contracts but it more likely serves to highlight that the definition of zero hours contracts can be skewed by the differing perceptions of employees and employers.

Comment

Zero hours contracts are often beneficial to both employers and employees looking for flexibility. Industries such as hospitality where demand surges at different times and workers such as students that have varied obligations on their time can both be well served by these types of contracts.

Clearly there is scope for abuse though; employers using zero hours contracts inappropriately by hiring staff into semi-permanent full-time positions on this basis may well face a clampdown in the near future. For specialist employment advice, please contact Aneil Balgobin via e-mail ABalgobin@rollingsons.co.uk or by telephone on 0207 611 4848.