The use and fairness of zero hours' contracts has been an issue that has attracted much media attention. Recent figures from the Office of National Statistics have further added to the debate and painted a confusing picture. They disclose that nearly half of the UK's biggest companies have employees on such casual contracts.
According to previous statistics (following a survey of workers) over half a million workers are on zero hours contracts which amounts to 2% of those in work. But in the report issued on 30 April 2014 (following a survey of employers), the ONS estimated that there were in fact 1.4 million zero hours' contracts in existence. The explanation for the significant (almost threefold) disparity in the figures has been put down to the fact that many individuals may have more than one zero hours' contract and also that employers may have a clearer understanding of the type of contracts they use.
Previous surveys have put the number at one million but also highlighted a concentration within the public and voluntary sectors. Employees with such contracts are also more likely to young and in low skilled and paid roles.
The potential prevalence of such contracts (in such diverse businesses as JD Wetherspoons and Buckingham Palace) is controversial, especially given the contractual terms that they may contain. In essence, a zero hours contract allows an employer to employee individuals but there is no guarantee that work will actually be provided. This means the individual is deemed to be "employed" but does not have certainty as to what hours they will be required to actually work or indeed what income they will receive.
As always the fairness of such contracts depends on a number of factors including the level of commitment required by the parties. Some contracts require an individual to accept and work any shifts offered and the level of notice the employee can be given when they are needed can be short. There is the risk that individuals can be deemed to be "employed" but be subject to a lack of stability and financial certainty and their hours are at the whim of an employer who can favour some workers above others. This has generated criticism and the Labour party has indicated that it would bring in restrictions if it were elected by the current Coalition government has (to date) been less willing to do so.
However, the controversy in the media may not in fact reflect the actual feelings of those with such contracts. Statistics indicate that only 16% of zero-hours workers said their employer often failed to provide them with sufficient hours each week. Put another way, 84% appear not to fall into that category. But then statistics can prove anything with the appropriate interpretation!
Zero hours contracts clearly provide employers with considerable flexibility in how they utilise staff especially in industries where demands fluctuate. For a number of employees this flexibility also appears to suit them. The government acknowledges that there are examples of the position being abused and so it is possible that minimum criteria to create additional protections for such employees may be forthcoming. With a UK general election now less than a year away, this issue will undoubtedly remain a hot topic.
Noele McClelland is a Partner and Head of Thorntons Employment Law team. For more information on zero hour contracts please contact Noele on 01382 229111 or email nmcclelland@thorntons-law.co.uk
